Impact of Inflation on SMEs & Tourism Industry

MGBBT0FYP Research
Project

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................3
Statistical Data Regarding Impact of Inflation on SMEs & Tourism Industry...........................3
Positive and Negative Impacts of Inflation.................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
An economic situation that results in increase in prices of commodities and services is
referred to as Inflation. There are various effects of inflation one such impact is decreasing
demand for goods & services in the economy due to decrease in purchasing power of the
customers. The adverse impacts of inflation are faced by both the business organizations and the
customers. The inflation affects the revenue of the business as the demand by consumers fall
generating low sales for their businesses (Athari and et.al., 2021). The impact over consumer is
that it becomes difficult for them to save money. High inflation creates a situation where the
people are unable to purchase even the essential goods and services. The prices basic life amities
such as food, shelter, medicines, fuel, etc. increases substantially.
The increase in inflation can be because of various factors that also affects the overall
efficiency of the economy. The list of factors that leads to increase in inflation in the economy
are primary causes, rise in the public spending, government expenditure’s deficit financing,
increase the money circulation velocity, increase in population, hoarding of products by
suppliers, exports, genuine shortage of products, trade unions, implication of indirect taxes,
reduction in taxes, increasing prices in international markets (Meo and et.al., 2018). In addition
to this some non – economic reasons also give rise to inflation, for example, natural calamities.
The inflation can be of certain types such as demand – pull inflation, supply – side inflation, cost
– push inflation, open inflation, hyper – inflation, repressed inflation.
The aim of the current study is to recognise the measures available to tourism companies
for countering the inflationary pressure of the economy exerted on the businesses.
Research Objects
 To understand the concept of inflation and factors responsible for it.
 To scrutinize the influence of the inflation over the SMEs through reliable statistics.
 To investigate the positive impacts and the negative impacts of inflation over the tourism
industry.
 To recommend the measures to reduce adverse impacts of the inflation on tourism
industry.
Research Questions
 What is inflation and what all are the reasons causing inflation?
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