INFLATION AND ITS REGULATION SOME MARRIAGE

Abstract

The aim of the work is to find ways to overcome the recently intensified inflationary processes for the country’s economy with minimal losses.

With this in mind, the first part of the work discusses the measures taken by international financial institutions and the authorities of individual countries to stimulate economic activity reduced under the influence of the World Pandemic. The following high inflation rates, including the US dollar, have been identified.

As a result of the description­-analysis of inflation imported to Georgia as a result of world reserve currency inflation and enhanced by a number of macroeconomic parameters of Georgia, as well as calculations based on undesirable forecast parameters based on the Irwin Fisher equation, a conclusion is made on inflation management in the country, Fiscal methods, in particular by reducing the budget deficit, to fight inflation, address the issue of the existence of vague budget allocations under Article „Other Expenditures“ of the expenditure part of the 2022 state budget of Georgia, as well as belonging to the category of capital and investment projects.

In order to reduce the budget deficit, which is necessary to fight inflation, an opinion is presented on the termination of their budget funding in cases of non­compliance with the anti­-inflationary and programmatic budget criteria for capital and investment projects.

In order to compensate for the reduced joint demand as a result of the above, the final part of the work presents the opinion on the creation and implementation of investment projects for the development of the country’s hydropower sector. The source of funding for the first phase of these projects is the use of funds accumulated in the Pension Agency. And to activate their shareholding mechanism for financing the further stages of the project.