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Inflation And Economy

December 12th, 2009

Inflation And Economy The rate of inflation and the economy are closely related to each other. The growth of the economy of the nation is judged by the growth in the Gross domestic product or the GDP but that is not enough to be able to understand as to how many people are actually doing well because of the rise in the Gross domestic product. The Gross domestic product is a gauge often used by the Government to show that India is indeed doing well. But often these ratings are not a mirror image of what seems to be happening in the country because the inflation rate is also a tool which helps us to witness what the common man is going through because the inflation rate carries with itself the prices of fruits, vegetables, cereals and other essential commodities which are required for daily usage.

The Inflation rate in India often crosses six or seven percent. Out side of India in the developed countries the rates of seven percent and beyond are unheard of. But in India the inflation goes high at several times. It has also led to the downfall of various governments who have been ineffective in controlling the rate of inflation and hence have invoked the anger of the people. The economic condition of the country and the rate of inflation go hand in hand and they should not always be talked about as alien to each other or not connected.

And hence countries should be looking at a high GSP growth and also on the other hand, low rates of inflation which will all be beneficial to the country and its people.

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