The Inflation Level Forecasting in Forming Regional and Municipal Budgets

The subject of the research is inflation level forecasting in forming, executing and analyzing the execution course of regional and municipal budgets. The purpose of the work is developing methods of inflation level evaluation to supply state and local authorities with necessary and sufficient operational data reflecting the specificity of respective regional economies concerning prognostic figures of monthly and yearly rates of inflation. The urgency of the research lies in the fact that the proposed approach to inflation level evaluation is relatively simple but at the same time effective and is based on the principles of integrity, responsiveness, economy, and effectiveness. The methodical base of the work is formal and dialectical logics used to reveal interconnections between inflation processes in the economy and of the procedures for long-term budget forecasting; as well as methods of deduction and induction employed to justify the approaches proposed; mathematics of logic was used to analyze the influence of the approaches on the regional and municipal budget indicators under present-day conditions. The authors suggest an analytical matrix containing the initial materials for inflation rate forecasting and make a try to develop a model of inflation rate forecasting that is based on the data of factual and prognostic consumer price index. It is concluded that the model of inflation rate forecasting is applicable for budget planning and analysis in specific regions and municipalities, budgetary institutions, as well as in the course of developing and realization of some regional and municipal budget funded projects, which appears to be important to increase analytical capacity of information relevant for external and internal users.