The ratings are not inflated, they are not comparable with the FIDE ratings. Inflation occurs when the mean rating increases without a real increase in playing strength. A player who dominate his country will eventually get a national rating of 2700.
If I play in a pool of 2 000 players with a rating of 850, I would dominate them and I would eventually reach a very undeserved rating of 2700. Many players of true playing strength slightly above 850 would eventually become experts and masters.