News

Singapore: Record Streak of Price Deflation

On Dec. 17, Reuters reported that "Japan's core consumer prices dropped in November at their fastest pace in a decade..., stoking fears of a return to deflation and wiping out the benefits former premier Shinzo Abe's stimulus policies."

Now, Reuters reports on price deflation in another Asian nation. Here's a brief Dec. 23 article:

Singapore's main price gauge contracted for a record tenth consecutive month in November, data showed on Wednesday, with prices down 0.1% from a year earlier.

The falling streak is the longest since 1991, the earliest period when percentage changes on core inflation data became available on the Singapore Department of Statistics website.

The Southeast Asian economy's core prices last contracted for nine consecutive months during the 2008-09 financial crisis.

Core inflation -- the central bank's favoured price measure -- was expected to have fallen 0.1%, according to the median of seven economists surveyed by Reuters.

Singapore's headline consumer price index was down 0.1% from a year earlier, data from the Department of Statistics showed. Economists had forecast a 0.2% drop.

Authorities in the city-state, battling its deepest ever recession due to the Covid-19 pandemic, expect core and headline inflation to come in between -0.5 and 0% in 2020.

Singapore is also facing rising debt levels. In 2019, the city-state recorded a government debt equivalent to 126.3% of the country's gross domestic product, according to government data. Price deflation is ongoing now, yet a major debt deflation may also be just around the corner.

Elliott Wave International's November 2020 Global Market Perspective showed this chart of a "new peak in the world's debt mountain" and said:

DebtMountain

Whether or not countries can service their debt will be the defining economic question of the coming decade. And amidst widespread deflation, nearly every developed and developing country on the planet will have to answer it. For now, mood remains positive, so the world remains awash in IOUs and governments still retain the ability to add more... Across the world, advanced economies have seen their collective debt-to-GDP ratios push past levels last seen at the end of World War II. The situation is building to an epic finale...