Author
Shagufta ANDLEEB* and Eatzaz AHMAD**
Abstract
This study analyses the commodity group-wise composition of CPI inflation rate and its implications for different income groups in Pakistan during January 1997 to January 2024. It is found that food inflation is the major component of inflation, and its contribution to overall inflation further increases during the periods of high inflation rates. Furthermore, during periods of high inflation, the inflation rate faced by lower-income groups has been systematically higher. The study concludes that the double-digit inflation in Pakistan has an impact similar to that of regressive income tax, amounting to low-income households subsidising higher-income households.
