3 Basic functions of the relationship problems of finance in the inflation

3.1 Key issues and ways to improve the anti-inflationary policy in the Republic of Kazakhstan

Increased inflationary process is a manifestation of social and economic instability in any economy. Much depends on the duration and rate of inflation . For Kazakhstan, the relevance of this theme is that due to the global financial crisis the inflation process , which began in the second half of 2007 , received prolonged and reached the critical level of runaway inflation . Reduce inflation to a moderate level is difficult , and depends not only on the state regulation of the economy in Kazakhstan , but also on consolidating the regulatory role of the advanced countries of the world.

The dynamics of inflation in the country since 2000 through moderately tough financial and economic policy and reforms in the financial system went into decline , becoming quite manageable and predictable with an average rate of about 6.5-8.5 % (Fig. 1. ) . However, there was a slight rise in inflation in 2003 , which created a series of internal prerequisites for more explosive annual inflation in 2007 -18.8 %. Dynamics shows that in periods of high inflation faster pace observed inflation for food products , and in 2007 there is a very high increase in food prices and services , including utilities .

In our view, inflation assumptions domestic nature were:

- excess wage growth and population income over labor productivity in many sectors of the Kazakh economy ;

- growth of tariffs for monopoly enterprises (electricity , gas, fuel and transport services) ;

- rising prices for food and essential services ;

- increase government expenditures on social services ;

However, a significant impetus to the current international inflation given external factors :

- the U.S. mortgage crisis and deepen payments crisis , which contributed substantially halt mortgage lending;

- significant rise in credit resources on world markets investing , under whose influence the Kazakh commercial banks sharply limited the long-term loans , which reduced business activity in the country;

- the global food crisis that resulted in higher prices for staple foods ;

Outpacing inflation in food complex and paid leads to a sharp decline in real incomes of the most vulnerable pensioners , welfare recipients , government employees with low wages (compared to the average wage ) .

Given the increasing dependence of further state of the economy from energy prices , especially oil , and capital inflows into the country, the development of inflation forecast for 2009 considered three scenarios of economic development :

- Scenario "moderate oil prices and moderate capital inflow " ( oil prices below $ 60 per barrel , below the average annual inflows of capital inflows into the country over the past 2 years) ;

- Scenario " moderate oil prices and high capital inflow " ( oil prices below $ 60 per barrel , higher than average annual inflows of capital inflows into the country over the past 2 years) ;

- Scenario " high oil prices " ( oil prices above $ 60 per barrel ) .

In all three versions made ​​the assumption that the future dynamics of the main indicators of real sector indicators will meet the Medium Term Plan . Thus , it is assumed that the average over the forecast period, GDP growth will be 9.6% , investment in fixed assets - 1 8-20 % wage - 8% per year , transfers from the budget to individuals - 8% per year . In addition, it was assumed that , under the approved republican budget for 2012, expenditures of the republican budget for 2012 compared to 2011 budget spending would increase by 28.1 %.

Were also taken into account the measures taken by the National Bank and the FSA in the work to limit the inflow of foreign capital has been called second-tier banks .

Dynamics of instruments of monetary policy was determined based on the prevailing situation separately for each scenario.

In the scenario "moderate oil prices and moderate capital inflow " is expected that the evaluation of lower oil prices as a long-term trend and increase the cost of borrowing on international capital markets will provide the decline in external financing new oil production projects and net external borrowing second-tier banks .

At the level of world oil prices , not exceeding $ 60 per barrel , the growth rate of exports of goods and services will be about 4-6% in 2009. The surplus of the balance of goods and international services will offset the rising payments on foreign debt and payment of dividends to foreign direct investors. It is expected that in 2009 will increase to 1 % of GDP.

With the transition to the final stage of most capital projects to develop oil and gas fields after 2008 will gradually decline in funding in the form of foreign direct investment . Additional funding will be provided through foreign borrowing by banks and enterprises of the republic .

Foreign capital inflows and export earnings will help to preserve the fundamental factors of possible strengthening of tenge , and further accumulation of international reserves and assets of the National Fund.

In this scenario, the banks' assets will grow on average for the next three years at 27% per year . Growth of banks' liabilities to non-residents will be about 9.5-10 billion dollars a year.

Average annual growth in international reserves and assets of the National Fund for the respective periods of 10% and 23% respectively .

Average values ​​of the main instruments of monetary policy for 2009-2012 , to obtain acceptable values ​​of inflation forecasts for this scenario , chosen at : transferable deposits with the National Bank - 790 billion, other deposits with the National Bank - $ 320 billion tenge , the volume of notes in circulation - 270 billion tenge.

When the assumptions made about the future dynamics of the real sector and the instruments of monetary policy for the scenario of moderate oil prices , with moderate capital inflows following forecast 2009. The average annual growth in the monetary base over the forecast period will be 18% of the money supply , deposits in the banking system credit to the economy of 27-28% . Average annual inflation in 2012 - 6.0-7.0 %.