How Soon Can Inflation Come?

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How Soon Can Inflation Come?
How Soon Can Inflation Come?

Video: How Soon Can Inflation Come?

Video: How Soon Can Inflation Come?
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The issue of rising prices for goods and services always remains topical. Inflation that threatens the safety of savings is an inevitable process, from the consequences of which one can and should protect oneself.

How soon can inflation come?
How soon can inflation come?

Inflation (from Italian "inflatio" - bloating) is the rise in prices for goods and services. In fact, it is a permanent process, since prices are constantly increasing, the question is only in the rate of this growth.

There are several types of inflation:

- moderate - at the level of 3-5% (maximum 10%) per year;

- galloping - 10-100% per year;

- high - up to 300% per year;

- hyperinflation - is 40-50% per month or up to 1000% per year.

Therefore, in relation to inflation, it is more correct to be interested not in when it will come, but in what the rate of its growth will be in the coming year.

Several departments are dealing with the problem of curbing inflation in Russia, in particular, the Ministry of Economic Development and the Ministry of Finance. The Bank of Russia is responsible for the development and implementation of the anti-inflationary policy. It determines the forecast inflation rate for the next year and takes a number of measures aimed at achieving the calculated indicator.

How to contain inflation

The Bank of Russia believes that the inflation rate in 2014 will remain within the forecast indicator of 5% (with a deviation in one direction or another by 1.5%). In other words, inflation for 2014 should not exceed 6.5%. However, most economists are confident that by the end of the year its level will surely exceed this value.

The economic sanctions in force today are already driving up prices. Thus, according to HSE specialists, sanctions against European and American manufacturers have already provoked an 8-9% rise in prices for a number of imported goods. In addition, in the fall, the government may turn on the "printing press" to increase the amount of money in circulation. This method of supporting some sectors of the domestic economy is actively lobbied by the Ministry of Economic Development, although the leadership of the Bank of Russia has an understanding that this could provoke a new round of inflation.

Today, the Central Bank is using a number of measures to reduce inflation:

- regulation of the key rate (repo rate), with which it is possible to change the amount of money in the economy: in recent months it has increased from 5.5 to 8%;

- free exchange rate of the national currency, although foreign exchange interventions in the market periodically occur.

How to protect yourself from inflation

A reliable and 100% effective way to protect against inflation has not yet been found, but there are several methods that can reduce the rate of depreciation of savings. The first and foremost of them is competent investments. You can buy shares of companies that are currently undervalued and wait for their value to rise. If there is enough money to buy real estate or a car, then you should not postpone the purchase: in conditions of inflation, their prices will surely rise.

In any case, keeping the earned rubles "under the mattress" does not make sense, it is better to put them on a deposit in a bank. Some experts advise diversifying risks by placing savings in equal shares in US dollars, euros and rubles.

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