ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

IneffeciencySubscribe to Ineffeciency

Dynamics of Inflation in Services

Price developments in services need to be analysed on the basis of CPI to study their contribution to inflation in relation to that of goods. At present, services sectors account for almost 50 per cent of the aggregate GDP. Higher price increases, rising productivity and increased tradability could create a â??virtuous circleâ?? associated with a higher share of services in GDP. However, reforms and privatisation programmes, if not associated with increased efficiency, may also contribute to a rise in charges and services prices.

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