Inflation rate

In everyday life, sometimes it is necessary to repeatthe word "inflation", and not all and not always understand its meaning. This term is used by economists in their activity, trying to describe the economic situation in the country. What is this phenomenon, and how to calculate the inflation rate? The question deserves a detailed study.

Inflation is the depreciation of money whenpreservation of the average income of the population. Because of the constant and rapid rise in prices for services, products, the purchasing power of money declines. To measure inflation, statistical indicators are used to change the price index for goods included in GDP. In the economy, it is called the GDP deflator. This indicator allows to find out, due to what the growth of GDP occurs: due to the growth of production or the rise in prices.

To reveal its numerical characteristic,calculate the inflation rate, for which it is necessary to take into account the cost that the consumer basket has. This concept includes the most necessary goods, services and products that a person needs to satisfy his basic needs. The composition of the consumer basket is changing in accordance with the state of the economy. If it contains a minimum set of products, then it is called the minimum consumer basket.

The price index allows you to monitor inflationary ordeflation processes that are taking place in the country. If this indicator increases, then the economic burden on the entire population of the country and the state increases.

The cost of the consumer basket passesapproval Rosgosstat and published in print quarterly. In order to identify the inflation rate, you need to calculate the ratio between the cost of the consumer basket baseline and current. This indicator is used for economic calculations of the rate of inflation, a decrease in the incomes of the population and, consequently, a deterioration in the quality of life. The rate of inflation is the increase in the price level for a specific period of time - it is expressed as a percentage.

If the price level for the current year rises toforty per cent, then the inflation rate will be equal to this indicator. Most often, the inflation rate is calculated for the year. If prices remain at the same level, we can speak about the absence of inflation.

Inflation has several types. It is hidden and open, depending on the issue of "empty" money. Distinguish inflation by the magnitude of price increases. If you are guided by this feature, you can distinguish three of its types: galloping, creeping and hyperinflation. With creeping inflation, prices for goods grow no more than ten percent during the year. This situation is observed in developed countries, whose economy is of a market nature. Sometimes creeping inflation is called moderate.

Galloping inflation is characterized byan abrupt increase in prices. It is inherent in countries with an unstable economy, where the inflation rate per year can be from fifty to two hundred percent. It is observed in the states of South Asia, Latin America and in countries that were once part of the USSR.

But the most dangerous kind of inflation ishyperinflation. With it, prices are rising very fast. During hyperinflation, money completely loses its purchasing power. The increase in prices for goods is from thousands or more per cent per year.

In addition to inflation, there is in the economy and reversea process that is called deflation. At the same time, there is a reduction in prices caused by the withdrawal of the excess portion of the money supply from circulation. Thus, the purchasing power of money rises.

Inflation also affects such an obligatory taxationpayment as a payment for negative impact: it is levied on businesses whose activities damage the environment. For example, waste production is carried out. This payment is calculated by multiplying the actual discharge of pollutants by a fixed fee and by the waste and inflation factors. The last factor is established in the Federal Law on the budget for a certain year. In 2012, the norms used to calculate payments for the use and pollution of natural resources were 2.05 and 1.67.