Inflation rate

In everyday life, it is sometimes necessary to repeat the 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 while maintaining the average income of the population. Due to the constant and rapid rise in prices for services, the products reduce the purchasing power of money. 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 determine its numerical characteristics, 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 varies according to 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 or deflationary processes that take 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 is approved by Rosgosstat and published quarterly in print. 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 inflation rate 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 has risen to forty percent, 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 by 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 by a spasmodic 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 once belonged to the USSR.

But the most dangerous kind of inflation is hyperinflation. 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 percent per year.

In addition to inflation, there is an inverse process in the economy, which is called deflation. At the same time, there is a decrease 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 tax payment as payment for negative impact: it is levied on enterprises 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 coefficients of waste and inflation. The last factor is established in the Federal Law on the budget for a certain year. In 2012, the standards used to calculate payments for the use and pollution of natural resources were 2.05 and 1.67.