Money Supply, Deficit, And Inflation in Pakistan * (INFLATION IN Pakistan) (Report‪)‬

1. INTRODUCTION Inflation is a burning issue in Pakistan. It is generally felt that for several years Pakistan has had a double-digit inflation. The public sector has used a mix of policies to control inflation, and it is also held responsible for its creation. The consumer price index (CPI) increased over 11 percent in 1981-82, and over 12 percent in 1990-91. Similarly, sensitive price index (SPI) increased over 15 percent in 1981-82, and over 12 percent in 1990-91. The GDP deflator was also double-digit for several years. Inflation not only affects sectoral allocation and distribution of income but also generates poverty. A prescription might not be appropriate until the roots of the disease are carefully investigated, which is the very reason for carrying out this study.