Статистика и экономика (Jan 2018)
The problem of inflation and dependence on imports in an open economy (on the example of the economy of the republic of Tajikistan)
Abstract
The main objective of the study is to identify the peculiarities of inflation trends in the context of large import dependence, as well as finding the ways to solve the problems of inflation and import dependence. In this connection, the article discusses in detail such issues as the specifics of inflation processes in the context of globalization, the interrelation between inflation and the foreign trade factor, the interrelation between inflation and the exchange rate. The peculiarities of inflation trends, as well as the interrelation between inflation and import dependence, are examined on the example of the economy of the Republic of Tajikistan. The theoretical basis of the study was the work of foreign, in particular Russian and native scientists on inflation issues in an open economy, inflationary tendencies in the context of globalization, the interrelation between inflation and integration processes, as well as the problems of import dependence. The statistical data of the Agency on Statistics under the President of the Republic of Tajikistan - www. stat.tj, the data of the website of the National Bank of the Republic of Tajikistan – www.nbt.tj were used as the information base for the years 2003-2016. Results: The positive and negative influence of the foreign trade factor on the level of inflation in the Republic of Tajikistan has been revealed. The positive effect of the foreign trade factor is the following: in conditions of a significant increase in the incomes of the population and a lack of domestic production potential, the import helps to reduce the large inflationary pressure that arises from the growth of domestic aggregate demand. On the other hand, the import becomes a factor that covers the domestic commodity deficit because the domestic production of the republic still cannot fully meet the aggregate demand for consumer goods. The negative impact can be attributed to the following: in the context of large import dependence, the increase in the prices of imported goods leads to the transmission of inflation, and there is also a significant impact of the exchange rate of the national currency (somoni) on the value of imported goods and, accordingly, on inflation. The negative consequences can also be attributed to the fact that the high import competitiveness creates barriers for the development of domestic production and acceleration of the import substitution process. Low import-substituting potential significantly reduces the positive effect of the devaluation of the national currency. To effectively use the policy of depreciation of the national currency in order to stimulate the development of domestic production, it is necessary to create conditions for a mobile reaction of domestic production to the devaluation policy. For this reason, there is a need to find the ways to reduce the growing import dependence of the republic. One way to solve this problem can be the timely use of a significant increase in the incomes of the population as a stimulating demand for accelerating the development of domestic production. The results of the research show that today the presence of large import dependence makes the economy of the Republic of Tajikistan vulnerable to external factors and contributes to the emergence of inflationary trends. Large import dependence increases the risk of transmission of international inflation, creates barriers to the development of domestic production, and reduces the effectiveness of the application of the monetary policy in order to accelerate the importsubstitution process.
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