THE IMPACT OF INFLATION ON CONSUMER PURCHASING POWER: A SECTORAL ANALYSIS

Abstract

Inflation significantly influences consumer purchasing power, impacting various sectors differently based on price elasticity, demand-supply dynamics, and income distribution. This paper examines sectoral variations in the effects of inflation, focusing on essential goods, luxury items, services, and technology. Through a comparative analysis, the study explores how rising inflation alters consumer behavior, shifts spending priorities, and affects overall economic stability. The findings suggest that while essential goods maintain demand despite inflation, discretionary spending declines, leading to sectoral imbalances. Policy recommendations for mitigating inflationary pressures and sustaining consumer purchasing power are also discussed.