North Caucasus- A problem with inflation...

[Iacabo]

I am currently playing as North Caucasus and am having slight trouble with inflation problems and I need your help, I have built quite a few industries and and expected such a problem to arise. I also believe the transition of the population from rural to urban has come into play with raising inflation.
The way things look right now are:
Date: OCT 13 2010
treasury: 2,719M
overall tax rate: 52.1%
inflation: 12.9%
unemployment: 3.2%
GDP/c: $12,192
DRA: 40%
infastucture rating: 108%
social services percent of total budget: 88.5%
I have a growing population and am trying to bring in some imigrants to offset the low unemployment.
If any has any suggestions I would appreciate them greatly. Also I'd be happy to get any more statistics if required.

[Uriens]

Few tips from me - lower social services (significantly) and wait a while until your inflation starts to cool down (don’t build any new industries, but no real need to turn off existing ones either). Don't forget that increasing social services increases inflation and lowers unemployment.
Tax rate looks ok, but I micro manage it (I put it on really low for small business and low income and really high on corporate and high income).

It will take a while (game months) until your inflation stops rising and starts dropping but it will happen. Also, doing it that way you wont start losing your GDP/c - your inflation will drop (slowly) after a while but your GDP/c will keep rising (also slowly).

I usually keep total of social services somewhere around recommended levels if my income can afford it. If not, I just keep the most important ones - infrastructure (Resupply), education (research - I'm a research freak) and health care (approval and birth/death) rate.

[Eric Larsen]

Iacabo,
Too bad there isn't a negative imigration bounty so you could pay people to imigrate. By that token too bad there isn't a negative emigration bounty so you can pay people to leave.
Thanks,

Eric Larsen

[Iacabo]

my social services are at the recommended level, it is 88.5% of total budget because I am not spending any on my military.

[red]

Recommended spending is what it takes to get a 100% rating, with no regard for economic conditions... it's not necessarily a good measure. Playing such an impoverished region with historically low social spending, you are pumping a lot of new money into the economy, raising the standard of living, etc. and will of course cause inflation. Check some developed region's starting social spending--I would be surprised if any were at 100%.

[Uriens]

my social services are at the recommended level, it is 88.5% of total budget because I am not spending any on my military.

Sorry for not being clear in my post. Those examples of social services I gave were after I stabilize my economy. Point is to keep your social services low until your inflation cools down and then get them somewhere near recommended levels SLOWLY - if you do it too much or too fast it can boost your inflation (be gentle with the changes you might say).

Also, around 12% isn't too much of the inflation and unless that still increases a lot on monthly bases you have nothing to worry. Just give it little time for inflation to stop going up and, after a while, you will notice it go down slowly while your GDP/c still goes up (slowly).

Basically, if you are running a small region you don't want to build too much at once as that makes your inflation shoot through the roof (building consumer, industrial and military factories has most impact).

Of course, I expect tkobo to give more precise and accurate advices as I don’t have nearly as much experience in economics as him even though I like to play small and undeveloped regions.

[tkobo]

I dont think ive played that region.

Have you tried the free flow of labor force treaty ?
My experience with this treaty does show that IF you have a higher GDP/c than your neighbors, getting this treaty with them will raise your unemployment as their citizens come to your region for work.

It dont think it has a major effect if any on immigration (making people move to your region for good) though.

And there is of course the Open Immagration/emmigration treaty,not usre how effective it is though.You'd probably also have to have a higher gdp/c and dar for it to work well though id think

[Iacabo]

I have 2 free labor force treaties one with Kazakistan and one with Uzbekistan.