Hello Traders,
Inflation is a big topic in Trade Conquest that always brings up questions. Here is a quick list of what factors affect it followed by a detailed breakdown for each point.
Inflation is a combination of:
1. The average Demand in goods for Agriculture, Meats, Alcohol, Luxury, Infrastructure, Crude Oil, Natural Gas, Gasoline and Diesel resources for your Home Market.
2. Debt and Economy development confidence measured by your Interest rates.
3. Counterfeit (If applicable).
4. Sudden increase in GDP, 10% or higher.
Positives and Negatives
-Inflation affects prices for buildings and Industries purchased not only by yourself as a business person, but for the nation as well, hurting their development for the need to pay higher prices.
-Increases Maintenance costs in proportion to inflation.
-On GDP growth:
0% to -10% Inflation: No effect on GDP growth.
Greater than 0% to 5% Inflation: The sweet spot for optimal GDP growth.
Greater than 5% to under 10% Inflation: No effect on GDP growth.
10%+ Inflation: Begins to negatively impact GDP growth, with significant penalties at very high levels.
-Possible unrest events like protests because of High Unrest.
Where to find the current inflation information
-Left click on a province, it’ll show on the top left along with Corporate Tax.
-Right click on a nation’s province, it’ll show in an Information window.
-Oval Office tab under “taxation” for your Home country.
1.
-The average Demand of the listed “Essential” goods can reach a low end of -75%. Although trying to meet the high demand would be Ideal, lowering prices for other goods would also have the same affects, even if you do not make as much profit from them as you would like.
-Do like many Major nations do, make a Business Agreement. Exploit other nation’s essential resources and sell it at your own market. An Undeveloped Economy might mean cheaper labor costs as well as new goods to exploit.
-In the Market Tab, Lock your higher tier resources, (The ones giving you the most profits) and sell them where there is most demand after you have Force Liquidated all essential goods at your Home Market to make sure demand is kept low. (Or sell 1 by 1 for the most profit)
-You can also purchase the needed goods from a market with low demand, and sell it to yours on Next Quarter. If you sell it the same Quarter you’ll get Market Manipulation penalties.
-Gasoline and Diesel are also important because higher demand will also increase your transportation costs.
2.
A Developed Economy will naturally have more resistance to inflation than Undeveloped Economies.
If your debt goes beyond your nation’s GDP, you will have an exponential inflation increase. Inflation is adjusted Monthly and if big changes are made, will adjust gradually over time.
How to Lower Debt if not Head of State:
-Higher Tier Industries: Increases Corporate Taxes revenue and Gross Domestic Product per Capital (GDPPC), which can mean higher Income tax revenue.
-Infrastructure such as Highways, Trains and Airports: Increases Investments Revenue.
-Build Banks and Financial Districts: Increases Corporate Taxes Revenue.
Pay Debt (When Head of State): Use your personal account to pay national debt. This will help improve inflation at the end of the year when budgets are re balanced.
3.
Opposing nations can carry out several Special Operations against your nation, just like you can. The “Counterfeit” operation can increase your inflation up to a maximum of +50%. This is on top of your base levels. You can pass a bill to help clean things up. It will however, naturally fall over time, faster on more Developed economies.
4.
If you have a sudden increase of GDP by 10% or higher, through High Tier Industries purchases or Conquest, this influx will be reflected on your inflation until the end of the year, and fall gradually over time afterwards.
I hope this information helps newcomers and veterans alike.
Best,
GrandPaw Games