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Planning: low inflation rate for the month of June by 0.5%, the annual inflation rate of 0.1%


yota691
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The meaning and the role and the impact of inflation in the movement of the economy

   
 

 
 

6/10/2017 0:00 
 
Adnan Kanani 
word inflation means the presence of rising prices for goods and services / of food, books and treatment of clothes, cars and rental properties and other "and then the inflation reflects the continuing rise process in the general price level, or equivalent words: - continuous decline in the value of money, and reflects a statistically inflation that the increase in average prices over a specified period of time, Kalshhr year . Do not move all the prices in the same direction or the same ratio, and then the relative prices , " the proportion of commodity prices , some of them to some" change, for example , some commodities prices rise higher than goods other , and accordingly has to be affected by the distribution Spendable income resulting from the goods, and public spending is changing. 
We understand the meaning of inflation that the temporary rise in the price of a commodity is not inflation, and the rising price of a commodity without being offset by a rise in the general level of prices is also inflation. 

Inflation is not the whole evil is 
seen a small amount of inflation - there is no limit agreed upon, but the proportion of less than two percent annually prepared by a few , many - that have positive effects on the economy, as seen as a pressure inherent risk, eroding the value of money, what gives an incentive for owners of savings to invest, rather than seeing it being eroded. 
Another reason to consider positively to low inflation rates that negotiations on wages is not easy, and then be easy relative prices to adjust when there is a general increase in prices. 
It also endeavors to achieve full price stability " , for example , by supporting some goods" can lead to reverse inflation "to any price reduction", which is seen as a result of negative conditioning in the movement of wages and production. 
For the benefit, each activity generates income is production in the gross domestic product and accounts vary affected production to inflation when there is not stability in the adjustment costs with the prices and quantities of production. 

When inflation is evil? 
Inflation rates in excess of the cash required for the freedom of the border and investment incentives are negative, but their effects may be devastating, when rates of numbers closer to fiction. 
Inflation is changing relative prices is also working on the payment of wages to rise, but it is noticeable that wages rise less often for higher prices, which means that wages actually have fallen. 
 If the decline in real wages high, it bode ill for most people because higher prices more than real wages means a lower standard of living. 
For example , suppose that the income or salary "Q" of people has increased in five years , 20 percent, and assume that the rate of inflation during the same period was 24 percent, if the real income for "X" has four percent shortage. 
Realtors earn as a result of inflation, as well as equity holders, a profit placebo sometimes , but financiers often do not win, if the benefits or returns that they receive less than inflation. 
In short, inflation is working on the re - distribution of income, through its impact on the value of people 's wealth, and reduce entry reality by reducing the purchasing power of money. 
But when you get an increase in the entry "nominal", the outcome will be as follows: when their incomes rise by more than the percentage rise in the index earning purchasing power higher, while those incomes do not rise by more than the percentage rise in the index, they either do not earn or lose " purchasing power does not change or go down. "
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CNN. Broadcasting While Making A Collect Call To Lift The Exchange Rate Of The Iraqi Dinar !

 

 

( by samson)
LINK

Inflation in Iraq .. a significant decline due to the positive indicators on the efficacy of reforms

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12th June, 2017

 

Confirmed a member of the Finance Committee MP for the Kurdistan Alliance Najiba Najib said the high rate of inflation came from Iraq's dependence on oil imports and the lack of local production. Najib said: that the Middle East region as a whole situation helps the growth of inflation and rising Madlath, Makdh, the importance of diversifying the economy through the sources of religious tourism and the banking sector and support industry and agriculture to reduce inflation rates.

For his part, member of the Finance Committee, the National Alliance MP Haitham al-Jubouri: that high inflation rates obtained by the rise in prices of services such as housing and electricity. He stressed Jubouri that the promotion of housing and distribution of residential land will ease Altdkhm, 

calling for the lifting of the exchange rate of the dinar against the dollar 

and avoid the arrival of inflation rates to high levels are difficult to avoid.

Economists expect inflation rates seen during the month of June this marked increase, according to data from the Ministry of Planning. In this context, an economic analyst nice Abdul Salam said there, the months of April and May have seen a significant rise in inflation is expected to inflation rates of up to a global rise unexpectedly.

He attributed the economic analyst out of high inflation in Iraq to the huge foreign debt, and pointed out: that the exchange is unjustified in government departments and the expansion of financial and administrative corruption led to an area of high inflation, along with remnants of the former regime, which is the basis of the problem. And: Tackling high rates of inflation depends on the central bank raised interest rates on deposits in order to encourage the deposit of funds in banks in order to absorb excess liquidity.

 

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Same call was made last year, and the year before that. It's crunch time: if the upcoming UN vote doesn't place Iraq in CH 8 - ????????????

 

Then what - if there one thing Iraq has going for it: they put a lot of promising info out there while garnering little in the results. Too much corruption-that is slowly on the change, reforms are moving ahead. Kicking ISIS OUT going well; is it going to be enough or not ?

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  • yota691 changed the title to Low inflation rate for the month of May by 1.1% and 0.1% annual rise
 
Monday, June 19, 2017 11:54
 
   
 
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Alsumaria News / Baghdad
announced the Ministry of Planning, Monday, the low inflation rate for the month of May by 1.1%, noting that the annual rate rose to 0.1%. 

The official spokesman for the Ministry of Planning Abdul - Zahra al - Hindawi in an interview with Alsumaria News that " the Central Bureau of Statistics of the Ministry of Planning completed the inflation report for the month of May 2017 on the basis of field data collection on the prices of goods and services components of the consumer basket of selected sample of sales outlets in the provinces of Iraq all, "noting that" these rates are calculated for goods and services that food, rent, transportation, communications, health, education and other , which include consumer is keeping. "

 
 

He Hindawi said "inflation for the month of May indices witnessed a decline by 1.1% due to lower food prices by 3.8%." 

He Hindawi said "annual inflation rose by 0.1% compared to May 2016 a month," he said . " The survey , which was conducted during the month of February did not include the two provinces because of the security situation witnessed in the provinces of Nineveh , Anbar ." 

Announced the Center for Statistics and Information Technology in January , 2012, it will begin using automation in the collection of different prices and times specified time instead of paper form in place previously, stressing that it will contribute to the speed of price collection and accuracy, and correct calculation in case of errors.
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First Published: 2017-06-24

 

Oil and the Iraqi dinar and the risk of inflation

 

Economic and social security in Iraq is threatened to collapse.

 

Middle East Online

 

By: Dr. Haidar Hussein Tohma

 

In most of the world's economies, the local currency exchange rate reflects the strength of the national economy and the extent of its involvement in the world trade and imports and exports, as well as the nature and volume of financial inflows and outflows from the country. In the oil countries there is a second story, often linked to the exchange rate of local currency flows of the oil supplier.

In Iraq, the path of exchange rates over the past five decades clearly reveals that fact: the Iraqi dinar witnessed the early 1970s, when oil revenues were flowing profusely, rising to reach $ 3 per dinar. While the exchange rate of the dinar collapsed after the freezing of Iraq's oil exports in the early nineties to reach about 3000 dinars per dollar. After 2003, the volume of oil exports and the recovery of oil price levels, exchange rates rose again to about 1200 dinars per dollar.

The dominance of oil on the dinar

The Iraqi economy is terrifyingly exposed to the country's supply of goods and services because of the weakness of national production in meeting the minimum demands of the public on various types of consumer goods and investment. This is why the government committed its institutions (especially the central bank) to fixing exchange rates at appropriate levels to ensure that the citizen obtains goods and services commensurate with current income levels.

The Iraqi government gets its revenues from the dollar in return for the export of large quantities of oil to the world markets, and the Ministry of Oil transferred these dollar balances to the account of the Ministry of Finance. Because most of the government expenditure in Iraqi dinar, the Ministry of Finance to replace the dollar oil Iraqi dinar already available to the Central Bank of Iraq, and consequent entry of the dollar to the Central Bank against the exit of the dinar. The latter controls the government dollars that are replaced by the Iraqi dinar within the reserve of foreign currency. This reserve of foreign exchange is used to feed the demand of the business sector (traders and others) and the family sector (the public) on the dollar in the exchange market, resulting in the exit of the dollar from the central bank against the entry of the dinar.

From the above it is clear that the Central Bank of Iraq is the only bidder of the dollar, and this is the specificity of the exchange rates in the oil countries. This fact has made exchange rates a function of oil prices and production levels, thus increasing the exposure of the economy to the world oil markets and their volatility. As the price of crude oil increases and the oil resource flows profusely, the central bank reserves of foreign currency rise. As the flow of that resource recedes, the foreign exchange reserves in the country shrink and exchange rates fall.

Prospects of the dinar in the context of the current oil scene

The decline in oil prices from the central bank's foreign exchange reserves has been eroding since 2015 as what comes out of the central bank to cover domestic demand from the dollar exceeds what the bank enters through the oil revenue window. This fact was reflected in the decline in foreign exchange reserves at the Central Bank for almost half, from about 80 billion dollars in 2014 to about 40 billion dollars at the moment. The steady decline of the country's foreign currency reserves means the Iraqi economy is sliding into the sharp part of the crisis.

Iraq is currently suffering from economic stagnation due to the decline in government expenditure (which is the engine of growth and economic stability), and if the central bank failed in the coming months to finance the market demand of the dollar, this threatens to devalue the dinar. The fact that inflation in Iraq is tightly linked to exchange rates (because most of the domestic demand is covered by imports), the deterioration of the dinar will immediately lead to inflationary pressures that make the economic challenge complex (recessionary), threatening the economic and social security of the country to collapse.

In light of these serious challenges and the resultant fever of speculating on the dinar that further deepens the crisis, it is imperative for the economic decision maker to anticipate the crisis by adopting a number of policies, perhaps the most important:

1 - Find alternative policies to auction the sale of currency due to the suspicion of waste and corruption contributed to widening the gap between the official exchange rate and the parallel exchange rate (market price) on the one hand, and accelerated the decline in the size of foreign reserves at the Central Bank on the other hand.

2. Reforming the country's tax system, specifically customs taxes, to reduce the horrendous exit of the dollar by modernizing the customs tax structure in a manner that limits the entry of luxury goods and expensive concessions, and contributes to stimulating the national product in which Iraq has a comparative advantage.

3. The volume of foreign exchange reserves is directly related to the government budget deficit. The high fiscal deficits in the past years have contributed significantly to the erosion of the central bank's reserves. This requires a continuation of the current public expenditure control approach, and the adoption of a cost-benefit approach to public expenditure to maximize the potential benefit. This requires a real revolution in the management of public finances with the need to focus on the importance of completing the final accounts for the detection of waste deposits and corruption in public expenditure in both current and investment.

4. Adopting the creeping exchange rate policy if the price of crude oil continues to fall to avoid a move towards the floating rate immediately when the foreign reserves of the central bank fall below the levels of currency cover.

5 - Attempt to move economic sectors able to cover part of the external import, such as the agricultural sector and some food industries through the provision of loans and facilities necessary for the promotion and competitiveness of the foreign product. The policy could achieve food security (albeit partially), absorb part of unemployment on the one hand, and curb foreign exchange bleeding on the other.

 

Dr.. Haidar Hussein Tohma

Researcher in Al-Furat Center for Development and Strategic Studies

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21 minutes ago, ChuckFinley said:

Nice read but these are things we here at DV know and have been saying for years. It was also nice to read something that I did not have to guess at the translation.   

 

Thanks Yota. 

 

I concur Chuck, hopefully with the liberation of Mosul they can advance on pending laws. Have a great weekend :tiphat:

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  • yota691 changed the title to Planning: low inflation rate for the month of June by 0.5%, the annual inflation rate of 0.1%

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