2. Group Member
01. Sajan Kumar
02. Ramesh Kumar
03. zubair Khan
04. Sehar Hayat
05. Bushra Kanwal
(Sindh University Jamshoro Pakistan)
3. SYNOPSIS
Introduction
Definition
Types of Inflation
Causes of Inflation
Effect of Inflation
How is Inflaton Measured
Consequences of Inflation
Measure of Inflation
4. INTRODUCTION
Inflation is defined as sustained increase in the price
level or a fall in the value of money.
When the level of the currency of a country exceeds
the level of production , inflation occurs.
Value of money depreciates with the occurrence of
inflation.
5. DEFINATION
Accourding to C.CROWTHER, “Inflation is state in
which the value of money is falling and the prices are
rising.”
In Economics, the word Inflation refers to General rise
in prices measured against a standard level of
purchasing power.
7. .Open Inflation
The rates where cost rise due to economic
trends to spending products and services.
.Suppressed Inflation
Existing Inflation disguised by government pricecontrols
or other interferences in the Economy such as subsidies. Such
suppression , nevertheless , can only be temporary because
No governmental measure can completely contain
accelerating inflation in the long run. Its also called
Repressed Inflation.
8. . Glopping Inflation-:
Very rapid Inflation which
is almost impossible to reduce.
. Creping Inflation-:
Circumstance where the
inflation of a nation increases gradually , but continually
, over time. This tends to be a typically pattern for many
nations. Although the increase the relatively small in the
short-term, as it continues over time the effect will
become greater and greater.
9. . Hyper Inflation-:
Hyper inflation is caused mainly excessive deficit
spending (financed by printing more money) by a
government some economists believe that
Social breakdown leads to hyperinflation (not vice
versa), and that its roots lie in political rather than
economic causes.
10. CAUSES OF INFLATION
FACTORS ON DEMAND SIDE:
Increase in money supply
Increases in disposable income
Deficit financing
Foreign exchange reserves
11. Contd…….
FACTORS ON SUPPY SIDE
Rise in administered prices
Erratic agriculture growth
Agriculture price policy
Inadequate industrial growth
13. EFFECT ON INFLATION
They add inefficiencies in the market, and make it
difficult for companies to budget or plan long-term.
Uncertainty about the future purchasing power of
money discourages investment and saving.
14. There can also be negative impacts to trade from an
increased instability in currency exchange prices
caused by unpredictable inflation.
Higher income tax rates.
Inflation rate in the economy is higher than rates in
other countries; this will increase imports and reduces
exports, leading to deficit in the balance of trade.
15.
16. Real GDP Growth 4.15% 5.43% 3.37%
Inflation 4.15 3.39 7.34
Consumer price index (CPI) 4.21 4.5 12.4
Wholesale price index (WPI) 221 247.72 278.19
Short term interest rate 6.07 6.3 10.7
Long term interest rate 8.7 8.7 9.6
Fiscal balance (per cent of GDP) 4.64 5.83 6.52
Current account balance
(per cent of GDP)
1.5 2.00 5.00
DETAILS 2017 2018 2019
17. CONSEQUENCES OF INFLATION
Adverse effect on production
Adverse effect on distribution of income
Obstacle to development
Changes in relative prices
Adverse effect on B.O.P
18. MEASURES OF INFLATION
1. Monetary policy
. Credit control
. Demonetization of currency
. Issues of new currency
2. Fiscal policy
. Reduction in unnecessary Expenditure
. Increase in Taxes
. Increase in Savings
. Surplus Budget
. Public Debit
3. Other measures
. To increase production
. Rational wage policy
. Price control
