Transcript The rate at which the general level of prices for goods and services

Inflation
 Fadil Almohsen
 200901348
Outline
 Definition of inflation
 How inflation is measured
 Causes of inflation
 The inflation rate in Saudi Arabia
 Conclusion
Definition of Inflation
THE RATE AT WHICH THE GENERAL LEVEL
OF PRICES FOR GOODS AND SERVICES IS
RISING, AND, SUBSEQUENTLY, PURCHASING
POWER IS FALLING
How inflation is measured
 Inflation is measured by comparing two sets of goods
at two points in time, and computing the increase in
cost not reflected by an increase in quality.
 There are many measures of inflation depending on
specific circumstances.
How inflation is measured
 CPI: which measures consumer prices.
 GDP deflator: which measures inflation in the whole
of the domestic economy.
Causes of inflation
 Natural factors like unfavorable weather conditions.
 Man-made problems which contribute to the rapid
increase in prices.
 Other inflation causes are: increases of the
population, rising prices of imported goods, and
increase in wages.
The inflation rate in Saudi Arabia
 Inflation rate refers to a general rise in prices
measured against a standard level of purchasing
power.
 The inflation rate in Saudi Arabia was recorded at
3.8 percent in October of 2012. Historically, from
2003 until 2012, Saudi Arabia Inflation Rate
averaged 3.8 Percent reaching an all-time high of 11.1
Percent in July of 2008 and a record low of 0.0
Percent in September of 2004.
The inflation rate in Saudi Arabia
Conclusion
 Definition of Inflation.
 How inflation is measured: CPI and GDP deflator.
 Causes of inflation: Natural factors, man-made
problems, increases of the population, rising prices
of imported goods, and increase in wages.
 The inflation rate in Saudi Arabia which was
recorded at 3.8 percent in October of 2012.
Thank You