Risk of inflationary pressure

HIGH levels of inflation could adversely affect economic performance as greater cost of goods and services erode profit and consumption. Inflation reduces purchasing power, raises prices of goods and services, lowers the value of the domestic currency and brings much uncertainty to the economy.according to the World Economic Outlook, globally, the annual world inflation level is projected to rise to 3.5 per cent this year from 3.2 per cent last year.