Inflation rate falls in Kurdistan
Planning Ministry stats show 2012 inflation were 7%
lowances as well as the inflow of money into the Region’s markets were not well planned and controlled, it would have well led to significant increases in the inflation rate.
Minister Sindi told parliament members that the consumer price index they use for calculating the inflation rate is constituted from 320 basic items, the prices of which are controlled on a monthly basis. This, according to Minister Sindi, has witnessed a 7% increase during 2012, which was slightly less than the increase rate of 2011.
It is generally accepted that the first inflation target of any government is preventing increase, which the KRG has apparently been successful in, and then trying to push the inflation down. The slight fall in inflation rate of Kurdistan indicates that KRG’s policies have been successful in changing the direction downwards.
The Minister highlighted the fact that the inflation rate of Kurdistan is now lower than that of Turkey, which is generally accepted as one of the most stable
economies in the region.
Inflation – factors
While causes of inflation are many including business boom, raise in salaries and other sources of income, inflow of money into an economy, but as Dr. Sindi reiterated, controlling and solving inflation is a monetary policy- related issue and this is not in the control of the KRG, but rather the central government can do that.
The minister explained that the central government of Iraq owns US$62 billion in the bank, which gives the government sufficient power to use this money wisely to drive its monetary policy and control inflation rate in the whole country and in Kurdistan Region