SINGAPORE (June 24): The current bout of deflation in Asia is likely to be temporary and investors should indeed expect lower prices in the region to eventually support domestic demand in the affected economies says Daniel Martin, Asia economist for London-based economic consultancy Capital Economics.

“Deflation in Asia should still be viewed as a temporary bout of “good” deflation,” he says.

His pronouncement comes hours after Singapore reported that its Consumer Price Index all item inflation edged up to -0.4% in May from -0.5% in April as a result of higher cost of private road transport.

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