Inflation at historic low of 0.44%Economy staring at deflation. Is it a good news?While a fall in prices may sound like good news to most laymen, economists see this as an ominous sign of a collapse in demand in the economy.The country is facing a negative inflation or deflation scenario with inflation touching near-zero level of 0.44% and expected to go down further in coming weeks. If negative inflation sustains for longer period of time, it will affect economic activities and in turn performance of most of the companies. In the current scenario, prices kredittkort test are falling not because of improved productivity but because of fall in demand. If deflation sustains for longer period of time, it will have a more adverse impact on demand. “Deflation results in less demand, lower production and weak economic growth,” said Citibank in a report “India Macroscope”.A negative inflation discourages investments in the kredittkort test economy. The real interest rate difference between nominal interest rate and inflation becomes very high, making funds costlier. As demand goes down, capacity utilization of manufacturing units declines. This discourages investment in capacity expansion.As performances of companies will be kredittkorttest hit, the Citibank report said investors should be selective while buying stocks in deflationary environment. It said invest in those companies whose products or services are not much affected by fall in demand. So, companies operating in health care, telecommunication and utilities like electricity distribution could be good bet to invest. Services of these companies will remain in demand even if the economy slows down.Investors also need to identify those companies where decline in prices lead to increase demand for their products, prompting them to produce more value-added products with greater economies of scale.