Post
Topic
Board Economics
Re: Inflation overpowers the value of money
by
Vishnu.Reang
on 06/08/2023, 15:59:16 UTC
1. Excessive Government borrowing: the government of many nations has seen borrowing as a norm, there accumulated debts requires generation to come, to service, this is common in African countries where the government borrow funds not for establishing an asset or building an institution that can generate generate revenue, for them to either service existing debts and build more infrastructures, they prefer borrowing funds for either embezzling it or using it for things that are not accounted for.
They do this without minding the consequences that may be accompanied with this act, at the end countries like this dips in high level of inflation and valueless currency.



Yes, you are absolutely right. Excessive government borrowing can cause a high inflation to a nation because When government borrowing becomes especially large it can substantially reduce the financial capital available to private sector firms, as well as lead to trade imbalances and even financial crises. And yes we can see the situation of our neighbour country Pakistan struggling to overcome from this attitude of borrowing money but still they are unable to overcome from this.