High Inflation rate leads to High Unemployment.

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Assalam O Alikum

Hello Hive Community members how are you? I hope that All of you enjoying good health and enjoying you life also. Today I am going to discussed the reasons of high unemployment rate in Pakistan. There are so many reasons behind this issue. The Big reason behind this issue is the high inflation rate in Pakistan. This high inflation rate is the mother of all problems in economic issues of Pakistan.

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High Inflation rate leads the economy slow down and due to economy slow down process the per capita income of the Pakistani is goes down and creates a huge economy crises in the country.
Inflation Rate Effect on Small and medium Enterprises.

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I am going to explain this economy cycle for understanding that how this high inflation rate suffers the country economy and became the people poor and also the cause of becoming closing of small and medium enterprises as well. Because this high inflation rate the cost of production for these small and medium enterprises goes high and they make losses by doing their operations and at the result the these small and medium enterprises closed their operation. So the Big reason behind the high Unemployment rate in Pakistan is the high inflation rate in Pakistan.

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High usage of imported Items
Due to the Closing of these small and medium enterprises Pakistani nation is bound to purchase the imported items because the non-availability of local items in market. It became hard to manage for government of Pakistan to manage their balance of payment because we need more dollars for purchasing these imported items around the world.

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Decrease in export Revenue of Pakistan
Due to high cost of Production in Pakistan for local industry the Export volume of Pakistan is decreasing day by day. Because large number of manufacturing units are closing due to this high cost of production causing by high inflation rate in Pakistan. Government of Pakistan take special measures and announce different type of incentive and relaxation is tax system of Pakistan to give support to the export sector of Pakistan to avoid shortage of dollars which are so important for the balance of payment. These special incentive and relaxing in tax systems also increase the expenditure of the Pakistani Government and also the decrease of revenue for the Pakistan economy income as well

So it is concluded that high inflation rate causes for slowing the economy of Pakistan and also became the reason of high unemployment rate in Pakistan.

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