We wrote earlier that in the third quarter of 2018, inflation on the GDP deflator (year to year) reached almost 14%. But in order to conduct an effective monetary policy, it is also important to identify a turning point and determine precisely when the inflationary acceleration began. For these purposes, it is better to analyze the data not in annual terms (to the corresponding period of the previous year), but on the basis of the previous period (in this case, to the previous quarter). When calculating in annual terms, the assessment of growth rates often does not contain the information necessary for operational management, since fluctuations within the period are averaged, and the information does not allow us to determine turning points in the development of the process accurately.
Author: U. Alex Akulich