deflation

#الانكماش
#deflation Deflation is a general and continuous decrease in the prices of goods and services in an economy, which increases the purchasing power of money. It is the opposite of inflation, which is characterized by high prices.

### **Causes of Contraction:**
1.
2.
3. **Tightening Monetary Policy**: When central banks raise interest rates or reduce cash supply, spending and investment may decrease.
4.

### **Negative effects:**
**Positive**: Increasing the purchasing power of consumers, especially for those with fixed income.

⏺China's deflationary problems worsened further in September, with consumer prices remaining weak and factory prices continuing to fall. The consumer price #Index rose 0.4% from a year earlier, although it was only above zero because of a jump in the price of fresh vegetables. Core consumer price index rose 0.1% in September, the weakest since February 2021, while producer prices fell for the 24th straight month.

⏺The figures highlight weakness in domestic demand before policymakers rolled out a slew of stimulus measures in late September to revive the economy. #China is facing its longest period of #deflation since the 1990s, with economy-wide price headlines falling for five straight quarters through June - a period that is likely to continue until September.

⏺Beijing has cut interest rates and increased support for real estate and equity markets since late September. The Treasury Department on Saturday promised more aid for the troubled real estate sector and debt-ridden local #governments . It is expected that through the effective implementation of existing and the launch of new support measures, the confidence and expectations of consumers and manufacturers will increase, and market demand will gradually recover

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