Inflation is a global phenomenon. It occurs when the demand for goods and services is high and cannot be met by the supply. Inflation also occurs when there is too much money in circulation and the consumer’s purchasing power increases. Only when demand and supply are balanced will there be no inflation. The task of reducing inflation lies not only with the government but is the responsibility of traders and consumers as well.
The government has taken some measures to curb inflation. Firstly, the setting up of huge cash and carry outlets has been encouraged. These outlets offer reasonably priced goods but do not allow customers to buy on credit, meaning that consumers can spend only money that they really have. In this way, consumers get their money’s worth and do not overspend. One other measure taken by the government to control inflation is the introduction of the Zero Inflation Day sales. This campaign is commendable as consumers can buy at lower prices. More such steps should be introduced by the government to check inflation.
Traders should heed the government’s call to reduce prices. When prices are low, consumers will continue to frequent an outlet and the trader can make profits through an increased number of shoppers as word spreads. High prices cause demands for higher wages, and higher wages will, in turn, result in even higher prices. As such, the inflation rate will continue to rise. Traders can profit from fair pricing as it will earn them customer loyalty, attract more customers and help put an end to the inflationary spiral.
Consumers should save their money and, when necessary, spend wisely. Commercial banks and licensed finance companies should provide attractive interest rates that will encourage more people to save. Consumers themselves should work out personal budgets and make an effort to cut down on unnecessary expenses. Lower savings by consumers also contribute to rising inflation and a change in spending habits by consumers can play a vital role in curbing inflation.
The struggle to lower the rate of inflation concerns all of us. Only when all the parties concerned-the government, traders and consumers-join forces, can inflation be reduced.
Vocabulary
inflation a continuing rise in prices caused by an increase in the money supply and demand for goods
commendable praiseworthy
inflationary spiral situation where higher prices cause demands for higher wages
