What are the factors responsible for the negative wholesale inflation in August
Explanation of the reasons behind negative wholesale inflation for the fifth consecutive month in August.
There are several factors responsible for the negative wholesale inflation in August for the fifth consecutive month:
- Low demand: The ongoing slowdown in the economy has led to reduced consumer spending, resulting in decreased demand for products. This has put downward pressure on prices, causing deflation.
- Declining commodity prices: Global factors such as falling crude oil prices and a decrease in international commodity prices have contributed to the negative wholesale inflation. Lower input costs for manufacturers have led to lower wholesale prices.
- Reduced economic activity: The COVID-19 pandemic has disrupted supply chains and manufacturing processes, leading to reduced industrial activity. This has resulted in excess supply and lower prices.
- Government measures: To stimulate economic growth, the government has implemented various measures such as lower taxes and interest rates. These measures have contributed to lower wholesale prices.
- Seasonal factors: Certain sectors, such as agriculture, may experience seasonal slumps in prices during specific months. These seasonal variations can also impact wholesale inflation.
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