Heated Economy

A few minutes back reports of 11% inflation broke. It has broken all records for the past 13 years. The markets have crashed. Its a pity that the ones who would be affected the most (BPL families) don't have enough means to bear this.

What is inflation?

• % change in the CPI(consumer price index) over the last year.
• compares the price levels of current year with the previous year.
• can be either "cost push" or "demand pull".
• In India, the figures published are for wholesale CPI( the CPI basket consists of only some products). The actual inflation is around 3 times, according to some analysts.
• The worst effect is that the value of money decreases as the inflation increases.
  

Lets hope that RBI and the Government will take some quick steps to control inflation.

Some trivia:

• Highest inflation - Zimbabwe 11000%
• Seychelles and Barbados actually have negative inflation.
• In US, the inflation currently is around 4.2%
• In India, the current inflation rate is 11%, highest in last 13 years.