Can any one tell the cause for sudden change in the inflation level?

Question

Can any one tell the cause for sudden change in the inflation level?

Answer 1

Largely because of energy prices and food prices.

BTW, they are linked to each other. Shortage in oil and concerns about global warming has ignited a market for oil made out of crop and that has pushed up food prices to sky rocket levels.

Answer 2

There are 4 major reasons for the sudden surge in inflation. They are:

a. Globalization - You reap both the benefits and fallouts of it. Ppl started exporting the staple crops to other countris as they fetch more money. And example is Corn. Corn is used for ethanol production in US and Brazil . As a result, there is a shortage of corn for consumption.

b. Dependence on Imported Oil: India depends on oil imports for majority of its needs. Hence, global markets dictate the terms

c. High Economic growth: This has made people more prosperous and hence increased thier spending power. Too much of spendng power without adequate supply fuels the prices

d. Asset bubbles: Real Estate and Stock Market have yielded very high retrns in the recent past. As a result, people feel wealthier and they tend to spend more. And agian the same thing as explained inthe above point happens.

Answer 3

simple answer.... High Gas Prices.....

Answer 4

Inflation has shooted up mainly because of the supply crunch.  Shortage of food grains and edible oil supply contributed to this.

And the biggest factor is the rocketing price of the Crude oil

Answer 5

Cost push inflation caused by the increase in gas prices is causing the manufacturing of products and services more expensive relative to the value of the dollar, so the cost to buy goods and/or services are going up so the value of the dollar is going down.