INFLATION RATES
To understand what is Inflation it´s necessary to give its definition, many organizations, economists and scientist define it like the “the increase of the prices of goods and services”, but is more complex that it sounds. Anyway, inflation occurs when the prices of goods and services increase over time. Inflation cannot be measured by an increase in the cost of one product or service, or even several products or services. Rather, inflation is a general increase in the overall price level of the goods and services in the economy (Federal Reserve, 2015). inflation cannot be easily managed by monetary authorities. There may also be a substantial time lag between policy and its inflation outcomes (Ouyang, Ramkishen S, & LI, 2015)
Already having the information is possible to talk about the inflation rate in Colombia. In past years, between 2007 and 2014, the inflation rate was under the 4%, so indicates by Dane, but nowadays the inflation increases in an uncontrolled manner among December of 2014 to December 2015, the mount of 3,11 percentile points (Revista Dinero, 2016). But in this moment the Central Bank of Colombia communicates that this is the highest rate of the last 7 years, in July of 2016 the inflation rate is 8,97%, increased 2,2 percentile points only in six months, that worrying for our economy and for prices of the basic food basket. Here is a graphic showing the inflation rate of the last five years:
Finally, the increases of the food affect considerately our company because the increases of the prices affect our flow cash, and we need to generate some credit loans to buy raw material to produce our product and, obviously, it generates a higher debt for us.
BIBLIOGRAPHY
Federal Reserve. (26 de January de 2015). Board of Governors of the Federal Reserve System. Obtained by https://www.federalreserve.gov/faqs/economy_14419.htm
Ouyang, A., Ramkishen S, R., & LI, J. (25 de July de 2015). Science Direct. Obtained by http://www.sciencedirect.com.ezproxy.unisabana.edu.co/science/article/pii/S0922142516300184
Revista Dinero. (2016). La Inflación más Alta en Los Últimos Siete Años. Revista Dinero. Obtained by http://www.dinero.com/economia/articulo/la-inflacion-alta-ultimos-anos/217685
