Monday, March 16, 2009

India may face deflation from next month: Goldman

Indian economy is headed towards deflation, said a leading global economic research firm, Goldman Sachs.

Goldman Sachs expects the year-on-year (y-o-y) change in the wholesale price index (WPI) to be negative starting from April and could remain so till end-2009, driven by the ongoing demand destruction as well as a high base from 2008.

Goldman expected the economy to enter a period of deflation from next month, and predicted it to last till the end of the calendar year due to continuing demand destruction and a sharp step up in the base.

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