The document is a report on inflation prepared for the Ministry of Economic Affairs in Pakistan by Talha Arfi. It discusses the definition of inflation, its causes such as excessive money supply growth and rising production costs. It examines the impact of inflation on individuals through higher costs of living and on society through reduced savings and unemployment. The role of the government in using monetary and fiscal policies to eliminate or enhance inflation is also reviewed. Recommendations are made to control inflation through low and steady monetary growth, increasing domestic production and subsidies, and controlling imports.

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