eco presen

8/3/2019 Eco Presen

http://slidepdf.com/reader/full/eco-presen 1/22

8/3/2019 Eco Presen


Mehreen Arshad

SP10-MBA-068

8/3/2019 Eco Presen


Abstract

• Inflation in Pakistan

• Double-digit inflation

• Objectives – Explain the main causes of inflation

– Brief view of effects of inflation

– Measures to control inflation

8/3/2019 Eco Presen


Trends in Inflation

8/3/2019 Eco Presen


Inflation in Zimbabwe

• Zimbabwe is suffering from aninflation crisis.

• The annual inflation 100,000%

• Highest in the world

• 2nd placed Iraq has anestimated inflation of 60%).

• Zimbabwe’s currency hastumbled to a record low of 25million Zimbabwe dollars toone US dollar.

• 100 US dollars couldexchange for nearly 20kg oflocal currency.

http://www.guardian.co.uk/world/2008/feb/22/zimbabwe

http://www.guardian.co.uk/world/2008/feb/22/zimbabwe

8/3/2019 Eco Presen


Maryam Tahir

SP10-MBA-065

8/3/2019 Eco Presen


Inflation

• “Too much money chasing too few goods”

• An increase in the general price level of goodsand services; alternatively, a decrease in

purchasing power of the dollar.• The number of dollars in circulation exceeds

the amount of goods and services available forpurchase

• The increase in the cost of living (prices forgoods and services).

8/3/2019 Eco Presen


Forms and Types of Inflation

• Kinds/Types of Inflation

– Demand - Pull inflation / Excess demand inflation

– Cost push inflation

– Pricing power inflation – Sectoral Inflation

– Hyperinflation

– High inflation

– Moderate inflation

– Low inflation

– Fiscal inflation

8/3/2019 Eco Presen


Forms and Types of Inflation

• Demand - Pull inflation:

– when the total demand for goods andservices in an economy exceeds the

available supply

• Cost push inflation:

– caused by substantial increase in the cost

of important goods or services where nosuitable alternative is available

8/3/2019 Eco Presen


Mubashar Rizwan

SP10-MBA-077

8/3/2019 Eco Presen


Inflation in Pakistan

• Objective of the Government

• The need for containment and stabilization

• Core Inflation – inflation adjusted for food and energy

• The State Bank of Pakistan -- core

inflation• Good predictor of future CPI inflation

8/3/2019 Eco Presen


Core Inflation

Core Inflation is defined as the persistent component of measured inflation that

excludes volatile and controlled prices. It reflects the normal supply and demand

conditions in the economy.

8/3/2019 Eco Presen


Measurement of Inflation in Pakitan

• Federal Bureau of Statistics (FBS) – consumer price index (CPI), a producer price

index (PPI)

– a wholesale price index (WPI) – the Sensitive Price Index (SPI)

– a GDP deflator.

• SBP – for monetary policy, focus on the CPI andcore inflation measures based on the CPI.

8/3/2019 Eco Presen


Usman Nazir

SP10-MBA-170

8/3/2019 Eco Presen


Causes of Inflation in Pakistan

• The rigidity in inflation is principally due to:

– rising international prices of manycommodities

– weakening of the rupee

– moderate recovery in the domestic economy

– an upward adjustment in administered prices

of power and key fuels. – Increased money supply

– Increased demand for imported items

8/3/2019 Eco Presen


Measures to control Inflation

• To reduce our Government LuxuryExpenses both Federal and Provincial.

• To reaccess the complete system of Directand Indirect Taxes.

• To increase the Production of Food,Industry and Service things.

http://www.blurtit.com/search/?st=ak&query=Taxes

http://www.blurtit.com/search/?st=ak&query=Taxes

8/3/2019 Eco Presen


• Should charged Capital Gain tax to Burgerand Theft Families and persons

• Reduce Unemployment

• Increase in Agriculture & industry

• SBP should take major steps to control

inflation

http://www.blurtit.com/search/?st=ak&query=Unemployment

http://www.blurtit.com/search/?st=ak&query=Unemployment

8/3/2019 Eco Presen


Tayyaba Iqbal

SP10-MBA-161

8/3/2019 Eco Presen


EFFECTS OF INFLATION ONECONOMY

• Good Effects

– Increase in production

– Increase in Employment

– Increase in investment

– Increase in Economic development

– Research and innovations are promoted

8/3/2019 Eco Presen


EFFECTS OF INFLATION ONECONOMY

• Harmful Effects

– Increase in cost of living

– Inequality in income distribution increases

– Decrease in saving

– Less Exports and more imports

– Productive investment falls

– Rate of interest

8/3/2019 Eco Presen


Conclusion

Consensus has developed among theeconomists that the inflation and output

growth are negatively correlated speciallyat the level of double digit inflation. Soinflation should remain single digit and

ideally in the range of 2.5%

eco presen

Documents