Way forward?? Who stands to gain from inflation?

As we all know, inflation is the rate at which all level of price for goods and services is growing and at the same time the purchasing power is falling. Inflation sometimes creates winners and losers; winners are the one’s that understands when inflation is expected and stable.

For the case of Asia, the Asian development bank released its new report enlightening that inflation in Asia is leaving millions of people behind, which in turns causing a wide gap between rich and the poor that loom to damage the region’s steadiness. According to the Asian development outlook in 20012 (ADO 2012), pointed out that income division are rising significantly in the region, where the richest 1% of household account for 6% to 8% of total income and that the richest households has increased over time.

According to the Gini coefficient added that inequalities have raised in the regions 3 largest economies; people’s Republic of China (PRC), Indonesia and India. Inequalities is rapidly increasing in India from 1990’s to 2010, it’s increased from 33 to 37, China from 32 to 43 and Indonesia from 29 to 39, there is also inequalities in distribution of new technology and infrastructural between the rural and the urban areas.  

There are some sets of argument that inflation is not the cause of poverty, but only that the rich tends to protected themselves against it or benefit from more than the poor. For example in some countries like Latin America, inflation tax does not affect those that are below the poverty line due to their inconsiderable cash means. 

Zakiyyah Tukur 


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