INFLATION IN SOUTH ASIA AND IT'S MACRO ECONOMIC LINKAGES

ABSTRACTThe objective of this paper is to analyze the consumer price inflation in South Asian Countries from 2000 to 2008. The annual percentage change in CPI and Average Annual Growth Rate in Consumer Price Indices are analyzed to examine the trend of inflation in South Asian Countries like Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan & Sri Lanka. India has average inflation of 5% but Sri Lanka is the hardest hit by the inflation among South Asian countries. Bhutan has very low rate of inflation and Maldives has rising trend of inflation. The inflation rates are co-related with the growth rate of gross domestic product and money supply of South Asian Countries. There is positive co-relation between the rate of…