The way of overcoming inflation.

Analysis of the causes and characteristics of inflation in Kazakhstan allows an appropriate deflationary policy and implementation mechanism, i.e. methods, ways, methods of combating inflation, comprehensively and meaningfully proceed on the pockets of its occurrence.

Scheme 5. Kazakhstan Inflation rate

Source: http://www.euromoneycountryrisk.com/Wiki/Kazakhstan

The conditions of overcoming the inflation.

1. The higher the inflation rate, the more difficult it is to fight it;

2. All the way inflation is uncivil, that is painful for the vast majority of the population;

Complex of measures to overcome inflation includes impacts on different sides of the productive and economic, social, legal, and institutional spheres of society, although decisive is the base model, production and economic.

Consider ways of overcoming inflation.

Overcoming inflation at a relatively ordinary demand macro-economic methods of using monetary and fiscal policy.

Anti-inflation policy includes various techniques for controlling the money supply:

1. Decrease in money supply through cash advance emissions reduction National Bank;

2. Increase in interest rates of centralized loans to more expensive credit resources and their availability

3. Increase in reserve requirements the Central Bank to commercial banks to restrict credit expansion of commercial banks;

4. Direct reduction credits from the Central Bank for the same purpose.

Theoretically it is possible to overcome inflation by ending the credit issue, but in our environment only at the cost of production; emission reductions, leading to the decline of production when reaching critical values in vital sectors of the economy or under the pressure of certain social groups has forced the Government to reopen the issue, and then another price increase.

This process is repeated successively: the absence of market competition at the micro level and weak market environment leads to an inflation of the waves. When you save a similar economic policies in calculating only to switch on the automatic market-based mechanisms, the situation is infinitely long and leads to the destruction of the country's economic potential

Anti-inflationary fiscal policy by raising taxes, cutting public spending and, on the basis of this, reducing the deficits.

Anti-inflation policy tax is to reduce the tax burden, particularly indirect taxation. Indirect taxes have inflation because the increase prices, reduce demand. Another option: high taxes is their pressure on production, limiting supply. And third, a significant tax burden normally associated with the action of multiple taxes, complicating the tax system, leading to tax evasion.

So, when inflation is preferable to simple and reliable tax system. Cuts in public expenditure involves the dissemination of the process at both the budget and in the sphere of material production for state enterprises and organizations. In the latter case, the anti-inflationary measures concern a second component of inflation – inflation costs, or producers.

To overcome the inflation of production costs, need to overcome the recession. This requires strengthening of motivational incentives of productive labour, interest in his effective results, rehabilitation of production work as a priority. This is achieved through the development of the private production sector, where the link between labour and the result of the direct effort. The state encourages the sector by ensuring a favorable legal and economic treatment of its operation. In the public sector productivity is assured promotion by improving tariff wage system and a variety of achievement needed indicators and benchmarks of production efficiency.

An essential element in the system of measures to combat inflation-creating market competition mechanism and the mechanism of economic liability of enterprises, all patterns organizations of ownership and all legal species. Anti-inflation effect of these mechanisms is the pattern: "cost-price- reduction-saving mass profits - increased production-increasing supply -satisfy demand. "

Establishment of a mechanism of competition involves antitrust activities, the development of different forms of ownership, legislative ensuring their equality in the economic-financial activity.

The bankruptcy mechanism requires consistent institutional, economic and financial measures to transform loss-making industries, which include filling volume and range of products, find a job or retraining workers, reconstruction companies, financing of the activities.

The most radical way to impact on inflation is controlling prices and wages in the State regulation of the economy.

Selection of price and wage control is defined in the programmer of short-term policies and varies widely depending on the inflation rate, rate of production, social protection needs.

Simultaneous limitation is fundamental both factors – wages and prices. Separate restriction cannot succeed for the following reasons.

Regulation only when prices lifting of restrictions on pay, as well as the lag in growth, gives rise to a variety of deficits and, as experience shows, to the subdued inflation.

Regulation (or pre-emption Regulation), only wages to reduce demand as well as the impact on reducing inflation manufacturers (sellers) can radically improve the situation.

First, the alleged accumulation funds of enterprises, organizations from the price factor cannot be implemented in the reproduction process when the flow is suppressed, the main factor of his labour, with capitalization of the funds due to the weakened (even lack of) labor activity incentives.

Secondly, the development of illegal ways to receive income, into use officially registered for possible implementation of nominal price of the product on the market; in their efforts to conduct national cash limits for Exchange will be held in foreign currency to increase barter operations; tighten control of illegal income sources will result in additional costs to the relevant State bodies.

Third, the difficulty with the implementation of output at the designated market prices within the country would entail an additional export it abroad, that in the context of domestic under-consumption, undesirable; because of the mediocre quality of domestic products and saturation of foreign markets for these products is available at prices lower than world prices, resulting in losses to the national economy.

The scenario of events in a given combination can worsen the crisis, lead to further destabilization of the economy of the Republic.

It seems more appropriate to a joint coherent regulation of prices and wages. The price regulation may take the form of restrictions of profitability. Primarily, this refers to the Basic, original products: oil, coal, gas, electricity and heat, grain, cotton, other primary agricultural products. It is their cost base of the pyramid is laid in the prices of products of subsequent technological conversion products.

Production of the enterprises-monopolists must strictly be limited to prices and any increase is subject to scrutiny by the public authorities.

Regulation of wages from the source (made) in a rigid level according to the real increase in productivity because the growth rates of nominal wages, equal rates of productivity growth are not inflationary in nature.

In General, the regulation of prices and wages must be effected through careful study and harmonization of measures to changes in levels of wage rates and prices for joint discussions of trade unions, representatives of the administration of enterprises and governments. The compromise agreement on levels of pay and prices shall be supported for a short period the agreement.

In these circumstances, inflation will be manageable and gradual decline in its rate possible. [13; p 98]

Inflation in Kazakhstan in October amounted to 0.7%, since the beginning of the year-4.6%

Consumer price index in Kazakhstan in October 2012, compared with the previous month was 100.7%, reports IA news-Kazakhstan citing Agency statistics show.The Agency reported that prices for food and non-food products rose by 0.6 per cent, the growth of prices and tariffs for paid services made up 0.9%.

From the beginning of the year (October 2012 compared to December 2011) prices and tariffs on consumer goods and services increased by 4.6%, foodstuffs – 3.8% – 2.8% and paid services-by 7.5%.

The annual figures (October 2012, by October 2011-year) inflation was 5.5%. [14]

After 2012, the inflation could be below the bottom border of the medium-term forecast corridor of 6-8 percent, said the head of the National Bank,Grigory Marchenko, reports IA news-Kazakhstan.

According to official figures, the statistics agency of Kazakhstan in June 2012, inflation was at 0.3%, the level of annual figures (in comparison with June, 2011)-4.9%. In January-June 2012, the inflation rate was 2.7 percent (in January-June 2011, 5.1%).

"It is too early to talk about that (...), but there are prerequisites to ensure that this year's inflation would be below the corridor in the 6-8%, which we had for this year declared," Marchenko said Wednesday at a news conference.

He noted that maintaining the current level of annual inflation rate, which is the lowest since 1999, contributes to a number of factors. In particular, he recalled that the price of food, which occupy 38% in the consumer price index, on world markets either decreased or remained stable. The decline in oil prices, he said, also had a favorable impact on the consumer price index in Kazakhstan, the proportion of energy which is 20-25%.In addition, the head of the National Bank added that the depreciation of the euro against the tenge by about 10% indicates that there were no grounds to raise the prices of imported goods. According to his data, Kazakhstan imports about 33-35% of consumer goods, many of which are imported from Europe.

"So we have a situation where more than two-thirds of those positions that are included in the consumer price index, prices in world markets or do not grow or even declined, he stressed.

The head of the National Bank noted that monetary factors over the past two years, practically have no effect on the inflation rate.

After 2011, inflation is at 7.4%. [15]

CONCLUSION

Today, inflation has adopted universal and chronic in many countries of the world. Republic of Kazakhstan is no exception.

Inflation in Kazakhstan has particular characteristics. First of all, it develops in a sharp decline in production.

Another feature of the inflation rate in Kazakhstan is that it originated from a State of ' suppressed inflation ' when prices of goods and services were artificially low, but there was a significant shortage of them. An important feature of the development of inflation in the country is the high degree of monopoly in the economy due to the presence of large companies working on the needs of the economy of the Soviet Union. The major raw material mining, metallurgical, chemical, machine-building enterprises are unique in the Republic and do not create a competitive environment in the market.

The next feature is the raw materials of Kazakhstan's economy, hence the reliance of domestic market for consumer goods from external markets.

Of course, the inflation could not have adversely affected the strain State of the market in Kazakhstan. Thus allowing a commercial activity of citizens, organizations and businesses to achieve the speed of movement of goods, improve the supply and demand market methods caused rampant speculation, leading to uncontrollable processes of redistribution. This process has acquired a spontaneous, uncontrollable, helped by easing of control by the public authorities, ignoring the laws of commercial entities, etc.

Political and psychological factors of inflation linked to the behavior of the population, economic entities on the situation prevailing in the State. Political instability, distrust of the Government, political crises, uncertainty in the future violate the natural functioning of monetary circulation, leads to "escape" from the money, which increases the demand for depreciable assets, not foreign currency, gold.

As we can see, the process of the development of the economy, inflation must therefore be measures to tackle inflation. The most appropriate is consistent regulation of prices and wages. Production of the enterprises-monopolists must strictly be limited to prices and any increase is subject to scrutiny by the public authorities.

Regulation of wages from the source (made) in a rigid level according to the real increase in productivity because the growth rates of nominal wages, equal rates of productivity growth are not inflationary in nature.

Generally, the regulation of prices and wages must be effected through careful study and harmonization of measures to changes in levels of wage rates and prices for joint discussions of trade unions, representatives of the administration of enterprises and Governments. The compromise agreement on levels of pay and prices shall be supported for a short period the agreement. In these circumstances, inflation will be manageable and gradual decline in its rate possible.

Дата добавления: 2015-10-31