Contact

News

 

Recession to Kill Surging Inflation


The annual inflation rate surged to 5.6% in July - the highest point in 17 years, the government announced Thursday.

The previous month's reading on annual inflation was 5%.

The July increase matched the 5.6% level in January 1991, when the Persian Gulf War was raging.

But Lakshman Achuthan, managing director of the Economic Cycle Research Institute, believes the worst of inflation's sting is over.

Inflation is being driven by food and energy prices, and consumers are pulling back on purchases, Achuthan said. He said this is partly why the price of new vehicles has fallen 0.8% over the last year, while the price of computers and computer equipment has plunged 11.8%.

"Inflation is not going to run away; it's going to be reduced," he said. "The bad news is that this is because we're in a recession. Recession kills inflation."
VIEW THIS ARTICLE ON CNN