Determinants of Food Price Inflation in Pakistan: an Empirical Analysis

In the recent years, food price inflation has risen very sharply at global level. It is also one of the thorniest issues in the economies of developing South Asian countries like Pakistan. To determine the factors behind this persistent food price inflation is a matter of great interest and concern for the academics and policy makers. This study focuses on the identification of main determinants of food price inflation in Pakistan. Empirical findings prove that both demand and supply side factors like inflation expectations, money supply, per capita GDP, support prices, food imports and food exports are the main determinants of food price inflation in Pakistan. Its findings may provide some important guide lines for policy makers to control the recent inflationary trends of food prices in the country.