The new competition in the low-margin industry arrives during a
deflationary spiral that has seen food prices drop for about 17 straight months, the longest such streak in more than 60 years.
If central banks cannot arrest the trend, such economies would be caught in a
deflationary spiral, the IMF said.
A French global investment bank says Korea faces the risk of a
deflationary spiral due to near-zero wage and price growth, pressuring the central bank to cut its key interest rate.
The Bank see no signs of a
deflationary spiral with a pick-up in wage growth helping to drive consumer spending.
But the sharpness of the decline brings the UK uncomfortably close to the scenario in the eurozone, where there are fears of a damaging
deflationary spiral after inflation fell to minus 0.2%.
But an inflation rate below 1% threatens to bring the UK uncomfortably closer to the scenario playing out in the eurozone, where there are fears of a damaging
deflationary spiral after inflation fell to minus 0.2%.
Berlin: German inflation slowed to its lowest level in over five years in December, raising pressure on European Central Bank President Mario Draghi to unveil unconventional measures later this month to ward off a
deflationary spiral in the eurozone.
Draghi's concern is that the malaise prompts investors, consumers and companies to pull back spending in anticipation of even weaker inflation, tipping Europe into a
deflationary spiral that would be hard to reverse.
The low inflation rate worries policy makers because it could slip further and lead to a
deflationary spiral in which falling prices choke off growth.
"Although our baseline forecast is that Cyprus will avoid falling into a
deflationary spiral, structural and transitory factors -- including depressed demand, fiscal austerity, a strong euro and falling energy prices -- present clear downside risks to our inflation projections.
Prices in the euro region increased at a rate of 0.8% in February, unchanged from January 2014, amid worries that the economy, made up of 18 nations, could stall into a
deflationary spiral.