Inflation in Pakistan.

Inflation, the increase in prices or the rise in the cost of living in a country, is currently a concernAing issue in Pakistan. Headline inflation, based on the consumAer price index (CPI), increased to 29.4% year: on: year in June 2023, compared to 21.3% in June 2022. Several key factors historically contribute to inflation in Pakistan:

Demand: Pull Inflation: ExcesAsive demand for goods and servicAes compared to their supply is one of the primary drivers of inflation in Pakistan. This can result from factors such as increased governAment spending, rising consumer demand, or expansionary monAetary policies that increase the money in circulation.

Cost: Push Inflation: This type of inflation occurs when the costs of production for businesses increase, and these higher costs are passed on to consumers in the form of higher prices. Factors contributing to cost: push inflation in Pakistan include rising energy prices, higher import costs, and wage pressures.

Exchange Rate Fluctuations: Fluctuations in the exchange rate, which Pakistan often faces, can make imports more expensive, leading to higher prices for imAported goods and services and contributing to inflation.

Global Commodity Prices: PakAistan relies on imports for essenAtial commodities, including oil and food. Changes in global commodiAty prices, especially increases, can lead to higher inflation in Pakistan as the cost of these...