Over the past few years, I have watched businesses in Pakistan respond to extraordinary inflationary pressure. The responses have been understandable. Sometimes prices were increased and sometimes there was sharp focus on costs. Hiring slowed and investment was postponed as organisations found ways to do more with less.

In my advisory work, I have increasingly wondered about the longer-term consequences of these decisions. What happens when behaviours developed for survival become normal ways of managing a business?

That was the question behind this article I wrote for Profit. And while the article focuses on Pakistani businesses, this is clearly not just a Pakistani question. Businesses around the world are again having to think about how they respond to volatile energy costs and renewed inflationary risks.

All of the familiar responses may become necessary again; raising prices, cutting costs, postponing investment and protecting margins. But my concern is what happens when short-term responses to inflation become long-term management habits.

Repeated cost cutting can protect today’s margins while gradually weakening people and organisational capability. Price increases can preserve profitability while slowly eroding the value proposition for customers. Investment in people, systems and processes becomes easier to postpone because the immediate numbers always seem more urgent.

That is the real inflation trap. The danger is not only that inflation raises the cost of doing business. It can also shorten the time horizon over which businesses are managed.
The challenge is not to ignore today’s pressures. It is to survive them without weakening the business you will need tomorrow.

I provide in this article, some of the ways to stop businesses from going down this self-destruct path.


https://profit.pakistantoday.com.pk/2026/09/21/the-inflation-trap-facing-pakistani-businesses