Global financial services provider Citi on Friday said that inflation moving into the negative territory is "no surprise" and is likely to remain below sub zero level for the next two to three months.
"This is no surprise and is largely due to the base effect...WPI comes in at -1.6 per cent; to remain in negative territory for 2-3 months," Citi said in a report.
Having touched a peak of 12.9 per cent in August last year, inflation turned negative in the first week of June and declined by 1.6 per cent. Though inflation turned negative, the prices of food items like fruit and vegetables, cereals and oil have continued to move up.
Citi, however, said though negative inflation is likely to persist for the next three months, there is upside risk after that period and it may reach four per cent by year end.
"We expect inflation to edge up to four per cent by year end," it added.