Negative inflation in India – Deflation for the first time since
Negative inflation or Deflation has been recorded in India for the first time since 1977-78. Inflation for week ended June 6 was at -1.61% in the 12 months to June 6, compared with the previous week’s annual rise of 0.13 percent.
The annual inflation rate was 11.66 percent during the corresponding week of the previous year. The wholesale price index or WPI is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.
Why there is deflation or negative inflation in India
Experts say that this is due to the a high statistical base and effect will keep the WPI inflation in the negative zone for atleast three months.
How long deflation will continue in India
They expect that going forward inflationary risks are already in sight. Oil prices have more than doubled in the last one month and also the fact that primary article prices are not showing any signs of easing. Some economists believe that by end-March 2010 inflation is expected to be between 5.5 percent to 6 percent based on the current trends.
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