According to the data released by the National Bureau of Statistics in June 1 1, the CPI only rose by 0.7% in March, setting a new low in the past year. As a warning line of inflation, when CPI is lower than 1.5%, or even lower than 1% for a period of time, people begin to worry about deflation.

Which industries benefit the most from deflation?

During the period of deflation, enterprises in the middle and lower reaches have more income, and their own production costs are reduced due to the decline in product prices of upstream enterprises. In the subsequent sales, you can get a bigger profit margin. It mainly includes iron and steel, nonferrous smelting, electric power, transportation, petroleum processing, transportation equipment manufacturing, electronics, special equipment manufacturing and other industries.

Why is there deflation?

1 Insufficient demand

Simply put, due to the economic downturn or the decline in consumer confidence, the market demand is insufficient, which leads to oversupply of goods and falling prices, thus leading to deflation.

2 overproduction

Due to the productivity increase brought by overproduction or technological progress, the supply of goods exceeds demand and the price drops, which leads to deflation.

3 monetary policy tightening

The central bank controls inflation by raising interest rates and reducing the money supply, but excessive austerity will lead to economic slowdown, reduced consumption and lower prices, which will lead to deflation.

The above are some contents of deflation, which can be paid attention to.