Inflation rate soars in Iraq

[lechesuerte]

Inflation rate soars in Iraq

Tuesday, February 15th 2011 8:37 PM

Baghdad, Feb. 15 (AKnews) - The Ministry of Planning and Development said Tuesday that the inflation rate increased since last December by 2% on January, according to reports prepared by the committees of the Planning ministry.

Abdul Zahra al-Hindawi told AKnews that the reasons behind the high inflation rate are the high rental rates in addition to the high prices of food entering the country.

The Ministry of Planning and Development in Iraq suggested Sunday that the federal government postpone the work of customs law, which was passed last week and will be implemented next March.

The Iraqi government issued late last month a decree to improve the system of customs on imported goods starting from next March.

The Presidency of Ministers council have the right to amend the law if the Finance Minister requested that.

"The annual inflation rate reached to 5.8% since last year, and it should be adressed during the next phase to stabilize the inflation rate," Hindawi added.

Customs fees are imposed on imported goods not included within the customs fees agenda at a rate less than 20% of their value, and the Council of Ministers according to the proposal of the Federal Finance Minister can modify the ratio for the same reasons included within the item, and the customs increase is a temporary measure until lifting the causes of economic increase.

The ICB announced last November that the inflation rate in Iraq reached to 2.7% compared with last September, and this encouraged the launch of currency for banks by 5% of the cash reserves found in it in order to expand lending operations and advance the development process. The main tasks of the ICB is to maintain the price stability and the implementation of monetary policy, including exchange rate policies, and managing the reserves of foreign currency, and issuing and managing the currency in addition to regulate the banking sector.

Reported by Saman Dazzayi

RN\GS AKnews

http://www.aknews.com/en/aknews/2/218436/

Edited February 15, 2011 by lechesuerte

[easyrider]

so they have raised the prices of food and the iraqis are broke and have a worthless currency this makes no sense to me. They have increasing flation because they wont raise the damn exhcnage rate where the iraqis can start buying the food. Why have high prices when they can't afford the food in the beginning. This is very confusing.

[Striker]

We must remember it wasn't to long ago they were cutting each others heads off. This whole counting money thing is new. They are just now figuring out what a budget is and what it is for. We must be patient. ooooosssaaaaaaa

[andy3978]

The more I read about the ME...the more I think after WWI we should have kept these countries and westernized them instead of letting them go. They have all demonstrated that they are incompetent and that opinion gets reinforced after each and every breaking news article.

[Zemaduvant]

God i hope they don't let inflation get out of control, that would not be good for us..

[In Iraq]

You know what inflation can lead to. I'm not going to say the word!

[magawatt]

What caught my eye was that the cause of inflation was rental rates and the high prices of food entering the country. Could foriegn suppliers be nudging prices up in anticipation of RV?

Edited February 15, 2011 by magawatt

[Darin]

The rate goes up 2% and they say it is soaring???

I thought the tariffs were delayed until March 6th?

[In Iraq]

What caught my eye was that the cause of inflation was rental rates and the high prices of food entering the country. Could foriegn suppliers be nudging prices up in anticipation of RV?

The price of food is high throughout the world right now. They had a special program on Press TV entitled "Food Wars". Interesting watch.

[andy3978]

the tariffs are what is going to cause inflation. Especially on imported food products. Thats a double whammy for the Iraqi citizen

[Kenneth]

Glenn Beck is talking today about our inflation, caused by monetizing our debt.

[smee2]

What caught my eye was that the cause of inflation was rental rates and the high prices of food entering the country. Could foriegn suppliers be nudging prices up in anticipation of RV?

I just read an article, here on the forum, today, that says the new tarrif will be up to 80% on things like fruits and vegetables, and appliances. 80% on food ... I suspect this is where the higher prices are coming from, and not just the supplier charging more. If you can buy potatoes at a dollar a pound and suddenly there is an 85% increase for imported potatoes so they are a dollar and eighty cents, why not sell the local ones that were a dollar a pound, say, before the import increase, for more too ... like a buck fifty?

Marketing 101 ... make it look like you are giving a break but keep on raking it in.

Oh, and i know I am being simplistic here, as the tarrifs don't translate to retail that way but this was just an example. In any event, I don't think that the higher food prices are stricly a matter of inflation per se, but the combination of increased prices for imported goods and opportunity to charge more for local goods. Which is good for the local grower and retailer, actually. If, and here is the big if, the consumer has the dollars, or in this case the dinar, to purchase.

We shall see what happens.

smee2

[andy3978]

ST. LOUIS – Global food prices have hit "dangerous levels" that could contribute to political instability, push millions of people into poverty and raise the cost of groceries, according to a new report from the World Bank.

http://news.yahoo.com/s/ap/20110215/ap_on_bi_ge/us_food_prices

[FOUNDIT]

SMOKE AND MIRRORS------THATS IT,PLAIN AND SIMPLE.DON'T BELIEVE IT.JUST ANOTHER LIE TO COMPLICATE THINGS...........

[lechesuerte]

SMOKE AND MIRRORS------THATS IT,PLAIN AND SIMPLE.DON'T BELIEVE IT.JUST ANOTHER LIE TO COMPLICATE THINGS...........

Quite possibly ... I just don't like that so many of Shabibi's quotes often times are centered on keeping inflation in check (which does make sense for the govenor of a central bank).

[FOUNDIT]

Quite possibly ... I just don't like that so many of Shabibi's quotes often times are centered on keeping inflation in check (which does make sense for the govenor of a central bank).

Yes like Sabbs quote that the Dinar will rise in value by the end of year 2010.

[lechesuerte]

Yes like Sabbs quote that the Dinar will rise in value by the end of year 2010.

Touche...but it may have been out of his control...we will probably never know.

[LettheRVbegin]

so they have raised the prices of food and the iraqis are broke and have a worthless currency this makes no sense to me. They have increasing flation because they wont raise the damn exhcnage rate where the iraqis can start buying the food. Why have high prices when they can't afford the food in the beginning. This is very confusing.

Easy, if it's confusing, it might be just right time for your to go to "sleep". YOu have been telling many other to get some sleep, and I guess now it is your turn

[easyrider]

Easy, if it's confusing, it might be just right time for your to go to "sleep". YOu have been telling many other to get some sleep, and I guess now it is your turn

to clear it up ive been saying this for years and basically it means when i say go to sleep is to RELAX. Yes, its my turn to get some sleep you are correct sir.

[zantac]

Inflation is rising in every country it’s just the norm given the state we are in so don’t fret DV members

Just today in the UK link below

http://www.guardian.co.uk/commentisfree/2011/feb/16/inflation-editorial

China & India will be the cause of the problem with high demand for goods & food. Instead of one bowl of rice they can now afford 2 bowls so why not eat them.

The price of fuel/petrol will become one of the biggest inflation rises during 2011 but again if you own a car you will get over the extra costs.

Most countries inflation rise before & after the festive period due to higher spending before Xmas & less after, its just the way of life.

Now using the word SOARING is a bit harsh but given Iraq’s inflation was at 3% (correct me if I am wrong) then 2% extra would be classed as Soaring, nearly double

Don’t panic it will all come out in the wash, I HOPE

Edited February 16, 2011 by zantac

[FuzzyUzzy]

The more I read about the ME...the more I think after WWI we should have kept these countries and westernized them instead of letting them go. They have all demonstrated that they are incompetent and that opinion gets reinforced after each and every breaking news article.

ive argued that point so many times but all that ends up happening is me being called a fascist.

+1 from me

RV ALREADY!

[jcampjr]

The more I read about the ME...the more I think after WWI we should have kept these countries and westernized them instead of letting them go. They have all demonstrated that they are incompetent and that opinion gets reinforced after each and every breaking news article.

I suggest we all go back and watch Lawrence of Arabia, That would be a good starting point in understanding what we are dealing with here.

[FXStockpiling]

Just to clear the smoke. "Inflation is good for a worthless currency" look at it this way, when inflation rises they must raise interest rates to keep people buying their money, in return their money is worth more because it is in demand. When you buy or sell a pair like EUR/USD and hold it overnight you will get paid or have to pay interest in the pair the next day. So most of the time people will push the pair in the direction that pays them daily interest.

So if Iraq has high inflation they will need to raise the interest rate to not only control imports but to have a currency that is favored over others.... any questions???

[dinardarius]

I hope that the USA can stay away from heavy inflation!

[wishwell11]

You know what inflation can lead to. I'm not going to say the word!

LOL..but they can drop the zeros so 1,000old = 1 dinar new and as the pumpers say, thats not officially a..."You know what" since they'll RV the new value after that. So I think we're safe to say it. BUT

Hark!... all is not lost....they did say the drop zero was to keep things stable and inflation down..

Well, the way I see it, the people now are protesting, things are unstable and going out of control...so per the pumper government, a drop zero maintains their current stability. Today, I don't think they want it if they look out their windows and review Facebook activity. I think this calls for a straight out RV with zeros and now!!!!

I Wonder if the escalating protests brought on the blackout in communication that some thought might be the beginning of the RV..Makes sense they did like Egypt, and cut communication in attempts to diffuse.

Go RV with Zeros!