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- CNBC Deflation is a decrease in the general price level of goods and services. It is the opposite of inflation, which is an increase in the general price level. Deflation occurs when the inflation rate falls below 0 percent. The most extreme form of deflation is a prolonged period of falling prices, called a deflationary spiral. This occurs when the deflationary forces become so strong that they cause a continuing fall in prices, leading to a decrease in demand, which leads to even lower prices and so on. This can be very damaging to an economy, as it reduces economic activity, leading to job losses and even a recession. Deflation can be caused by a decrease in the money supply, a decrease in government spending, or a decrease in aggregate demand. The most famous example of deflation was the Great Depression of the 1930s.
The trading week in Asia opens against an increasingly bullish global backdrop fueled by continued strength in U.S. stocks, but with local sentiment more circumspect due to the uncertainty surrounding China's deep-rooted economic problems. The People's Bank of China is expected to cut its loan prime rates on Monday, Beijing's latest move in a series of monetary, fiscal and liquidity support measures to shore up the imploding property sector, revive growth and fight off deflation. PBOC Governor Pan Gongsheng told a financial forum in Beijing on Friday that the LPR will be reduced by 20 to 25 basis points on Monday, the official Xinhua news agency quoted Pan as saying.
(Bloomberg) -- Profits at China’s industrial firms in September declined at a faster pace than a month earlier, as deflationary pressures sap the strength of corporate finances.Most Read from BloombergThe Tartarian CandidateBooming Cambridge Exposes England’s Widening Wealth GapRobotaxis Are No Friend of Public TransportationA Courtyard Apartment Building Designed for Southwest SprawlArgentina Drug Trafficking Hotspot Sees Murders PlungeLast month’s industrial profits at large Chinese companies
We can start today's look at the UK economic situation with some good news. We have seen a further fall in shop prices according to the British Retail Consortium. October saw shop prices fall marginally further into deflation for the third consecutive month. Food inflation eased, particularly for meat, fish and tea as well as…
(Bloomberg) -- Chinese stocks in Hong Kong declined after a high-profile legislative meeting let down some investors who had been hoping for large-scale stimulus to revive domestic demand and combat deflation. Most Read from BloombergThe Leaf Blowers Will Not Go QuietlyArizona Elections Signal Robust Immigration Enforcement Under TrumpScoring an Architectural Breakthrough in Denver’s RiNo DistrictKey Ballot Initiatives and Local Races Highlight Views on Abortion, ImmigrationThe Hang Seng China E
(Bloomberg) -- Asian shares declined after China’s debt swap program looked insufficient to some investors and data showed persistent deflationary pressures in the world’s No. 2 economy.Most Read from BloombergThe Leaf Blowers Will Not Go QuietlyArizona Elections Signal Robust Immigration Enforcement Under TrumpScoring an Architectural Breakthrough in Denver’s RiNo DistrictKey Ballot Initiatives and Local Races Highlight Views on Abortion, ImmigrationA gauge of the region’s equities dropped as m