While Australia struggles to tackle the rising cost of living, other countries have the opposite problem. What is deflation and why can it be bad for the economy?
Price s for essential goods such as chillies have continued to fall in Indonesia , with the economy recording deflation for the fifth month in a row.
"It will significantly impact the purchasing power, especially for the lower-middle class who spend the most on food," she told reporters early this month.However, the decline in prices has come after they skyrocketed last year and wages did not keep up with the inflation. "If demand keeps weakening, businesses, even farmers, will reduce their production activities … they will carry out cost efficiency which will result in reducing business expansion and can also lead to lay-offs," she said.Ms Mardian also said the number of people losing their jobs had contributed to weakened purchasing power in Indonesia.
But, because buying dresses and clothes wasn't essential to people's everyday needs, sales had dropped 50 per cent, she said.The drop in sales led to her reducing the number of garments her firm made, which in turn impacted her staff and other tailors from whom she used to order more."We don't want to lose our sources of income, we just want to make ends meet and live in peace," he said.
After China's property market implosion, there are growing fears its banking and financial system may be impacted too. It's further proof that China's economy is unravelling at a pace previously thought unimaginable, writes Ian Verrender.
Price Consumer Deflation Inflation Economy Indonesia Online Shopping Market Rates People's Bank Of China Bank Indonesia Jakarta Beijing
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