The economy of Pakistan is 35th largest in the world. Pakistan, with a population of about 16 million people has undergone a remarkable economic growth during last few years, but one of the core problem is still Inflation. Inflation effects the different sectors of the economy. Hike in fuel prices restricts our life, decreasing the purchasing power. Now a day the prices of Petroleum have increased, which means the price of everything would increase likewise. The economist report highlights that in Pakistan from 2008 -2012 are highly inflationary due to expansionary Monetary policy. In Pakistan, the most important thing is the rise in prices of oil, gas, excise duties and the increase in the utility tariffs. Due to increase in international oil all energy intensive industry products prices also increased. According to the International Monetary Fund (IMF) the Average Inflation in Pakistan was reported at 20.78 % change in 2009. In 2015 Pakistan's Average Inflation is expected to be 6.00 %.The income increases at a slower rate as inflation, the standard of living declines day by day. This uncontrolled Inflation effects common man badly, Utility bills have increased by many folds and the prices of daily use items increases by two folds .People of Pakistan cannot afford good health care because the consultation Fees and the Hospital expenditures that are very high . The most immediate effects of inflation are the decreased purchasing power of the rupee and its depreciation. In Pakistan people's expenditure is more than their income. Now times has come that every member of the family should earn money or contribute their share. Strict control over the supply of money is the way we can control inflation effectively and keep the economy of the country in a strong and stable position.