Deflation or rising inflation - what is the risk?


Low/falling inflation suggests that right now deflation is maybe more of a risk than rising inflation in developed countries. Falling inflation reflects significant spare capacity globally and soft commodity prices.

Inflation is likely to stop falling next year as global growth picks up, but a significant rise in inflation looks a way off.

This means low interest rates will be with us for quite a while which is a positive for growth assets.

Read the full article by Dr. Shane Oliver, AMP's Head of Investment Strategy and Chief Economist.