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griha shobha magazine subscription Risk of Hurting Poor It carries risk of hurting poor more as in lowincome societies with high inequities an inflation rate of 4% (+ 2%) seem callous. o E.g. 8% food inflation and 2% in rest would yield 5% CPI inflation. It is well within limit but it can push many people into distress or poverty as they spend over 50% income on food. Issues in fixing and maintenance of target inflation rate as 40 o Persistent low inflation increases the risk of deflation i.e. fall in prices of goods and services due to lower growth rate and higher unemployment. It has a negative impact on the Financial System due to reduced savings and in turn lower profitability of the financial sector. o Higher inflation increases the risk of stagflation i.e. rising prices with high unemployment and slow economic growth griha shobha magazine in hindi.

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