, Singapore

Singapore revealed as most exposed to disinflationary pressures

GDP deflator nearing decade low.

According to a Morgan Stanley report, Singapore, China, Hong Kong, Korea, Taiwan, and Thailand are most exposed to disinflationary pressures. Morgan Stanley noted that GDP deflator for the region excluding India and Indonesia has been decelerating since 3Q11 and is now close to a decade low.

Here's more:

A combination of weaker domestic demand, slower growth in China, and its impact on commodity prices and disinflationary pressures from developed markets is driving this disinflationary trend.

We ae particularly watchful of this emergng trend as it comes at a time when the region is already beginning to face the challenges of deteriorating demographics and high levels of debt-to-GDP. Disinflationary presures, if sustained, will weigh on nominal GDP growth and push up real interest rates in the economy.

 

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