1. Institute of Cost and Management Accountants of Pakistan
INFLATION
 Prepared For : Ministry of Economic Affairs
 Prepared By : Talha Arfi
 Registration# : 20090498
Date : Dec 08, 2010

2. 2
STRUCTURE
 What is inflation?
 Inflation and our monetary system.
 Causes of inflation.
 Impact of inflation on our lives and society.
 Role of government to eliminate/ enhance inflation.
 Decline of our standard of lives due to inflation.
 Conclusion.
 Recommendations.
 Questions and answers.

3. What is inflation? 3
 Rise in the prices of goods and services.
 Decline in the real value of money.
 Loss of purchasing power.

4. 4
Inflation and our monetary system
 Discount rate
 Consumer Price Index (CPI)

5. Causes of inflation 5
 Excessive growth in the supply of money.
 Rise in production costs.
 International lending & National debts.
 Federal taxes on consumer products.
 Black money.
 Population growth.
 Deficit financing.
 Political Instability.
 Natural calamites.
 Food Inflation.

6. 6
Impact of inflation on our lives and society
 Impact of inflation on our lives :
 Hoarding.
 Distortion of relative prices.
 Cost of living.
 Fixed income recipients will feel the heat.
 Impact of inflation on society :
 Lowers national saving.
 Currency debasement.
 Unemployment.
 Poverty.
 Economic uncertainty.

7. 7
Role of govt. to eliminate/enhance inflation
 Monetary policies.
 Subsidies.
 Price system.
 Lift certain import controls.
 Increased interest rate.
 Inflation targeting.
 Regulate transfer of foreign currency reserves.

8. 8
Decline of our standard of lives due to inflation
 High prices.
 Financial problems.
 Less consumption.

9. Conclusion 9
 Strategic planning to control inflation.
 Encourage domestic production.
 Investments in consumer goods.
 Subsidies for agriculture sector.
 Attract foreign investments.
 Monitoring system to evaluate the process.

10. Recommendations 10
 Low steady rate of inflation.
 Money supply must grow faster than Real GDP.
 Reduce imports and increase exports.
 Price support programs.
 Provision of subsidies.
 Increase production.
 Controlled circulation of currency.
 Controlled foreign exchange policy
 Avoid use of luxuries.

11. 11

12. Questions and Answers 12