Economists warn of "vicious inflation" in Iraq
11-11-2011 | (Voice of Iraq)Mohammed Karim-radio free Iraq
Iraqi Central Bank tries to maintain current levels of inflation, amounting to 7.6%, according to latest reports.
The Deputy Governor of the Bank the appearance of Mohamed Saleh reporters for radio free Iraq that continuously monitors the Bank inflation levels, and will not hesitate to intervene forcefully in the event of an increase of two scales decimal places or more via the tools of monetary policy since the exchange rate and interest of the Iraqi dinar.
The benefit of continuing high inflation rates of below 3 percent earlier this year to 7.6% is caused by the near total import of foodstuffs, which are its stock market to speculative operations, leading to high prices of these materials by 140% since 2000 and so far, has led to what termed "imported inflation" which reflected negatively on the economy of Iraq, because it creates a so-called "case of inflationary expectations," which is more dangerous than inflation itself on the budgets of States generally, because it speeds up The pace of escalating price index.
The second reason inflation is escalating in waste and overspending and corruption in the operational budget of the Iraqi State, which corresponds to an increase in the operational budget decline in production, as well as wasteful Government expenditure of fuel consumption, and the purchase of furniture, cars, etc., portends disastrous consequences on the local economy, as Deputy Governor of the Central Bank.
Not only Iraqi economists, including Dr. Helal altaian shared the Central Bank, but his warnings have gone further, warning of the collapse of the currency in light of current economic and inflationary data, and the fall of the Iraqi economy into so-called "vicious inflation" which means, inter alia, the means, the shift towards cash without a cover version, as happened in the 1990s.
As Economist on behalf of Abdul Hadi believes that the overall rate of inflation will continue to increase over the coming months, and the tools of monetary policy will be futile for the Central Bank of useful in curbing the epidemic, because commodity supply and local service is still absent from the economic scene, and instead offer foreign importer, if the dumping suffered by the domestic market since 2003 till now.
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