Market Prices Inflation

Market prices inflation

Introduction

Inflation is the increase in market prices at a certain time. These effects can be both negative and positive. The negatives affect the value of the currency, and positive increase the level of consumption. In Colombia it is usual to measure inflation according to variations in the consumer price index. This index is representative of the consumption basket of average and low -income households. They do not include all the goods sold or produced in Colombia. The greatest increases come from the prices of food and fuels and for the indexation of other regulators. 

Developing

The greatest deceleration occurred in part for collars of exogenous offer. Excesses in the use of productive capacity decreased during the first and second quarter. Public services also show important adjustments, which are related to increased costs and indexing of rates. Within domestic demand, the gross capital formation presented the strongest deceleration. During the year of the year it has been observed that the idle productive capacity of the economy has tended to increase, and that demand pressures have not continued to increase and could even be yielding.

On the labor market side, the interruption of the decreasing trend in the unemployment rate and the fall of the wage earning could anticipate lower pressures on this front in the remainder of the year. The monetary aggregates and deposits between January and June the monetary base that is the source of primary liquidity of the economy, the demand for cash that responds to the decisions of the people and signatures about the amount of money to use in their commercial transactions, continuousFounding and registering annual June 6.

8%. On the other hand, the deposits or PSE of the banks, which in the last year have been the main source of financing.

The weakening of world growth mainly from the developed economy and several emerging can have an impact on a lower rhythm of expansion of our real exports, the increase in food and regulated prices which continued to affect the available income of households, maintaining a rhythmOf expansion of private consumption less than that observed in the last two years, public investment will maintain a low dynamism while the local and regional development plans are launched, this situation can be extended to good entering the second semester.

In particular, the uncertainty surrounding public investment in 2008 is high, in 2004 last year when the change of local and regional governments was made. The perspectives of inflation in the remainder of the year and in May measured during 2009, they would be determined by two forces acting in opposite directions, risks of inflation expectations are added in Colombia in Colombia ascending and far from the goals of the monetary authority,What together with the presence of very widespread indexation mechanisms, can expand external pressures and generate second round settings in salaries and prices.

conclusion

The inflation forecasts and their ranges of uncertainty increased by the second semester, the total consumer inflation would tend to remain at high levels in which 2008 remains although some reduction is expected from September or October due to minors readjusted in prices by pricesthe food. In conclusion, the importance of inflation is not only important in the great powers, but in each of us it is affecting from the most important to the smallest, so it is of great importance to have inflation below our usual indices.