Falling prices aren't just a European or Japanese problem; deflationary forces are starting to intensify across Asia, economists warn.
"The entrenched deflationary trend in [producer prices] has been our single biggest macro concern in Asia," said Chetan Ahya, chief economist for Morgan Stanley in Asia.
"The weakness in aggregate demand is resulting in a feedback loop where deflationary pressures are intensifying – as evident in the [producer prices] moving even further into deflation," he said.
China, which is at the heart of the region's deflation challenge, has seen 41 consecutive months of falling producer - or wholesale - prices. In July, the country's producer prices index (PPI) fell 5.4 percent from a year earlier, the worst reading since late 2009, during the aftermath of the global financial crisis.
Over the past nine months, PPI deflation pressures have reached nine out of ten economies in the region. Indonesia is the only country that continues to see rising factory gate prices.