Although the economies of these countries are heterogeneous, many were highly vulnerable to a reduction in capital flows because their economic expansions had been financed to a considerable extent by external borrowing. Reduced external demand has also had a significant impact on several countries in the region.
With regard to prices, import prices continue to decline mainly reflecting the softening of international commodity prices. Domestic wholesale prices are also declining faster from the effects of the decline in crude oil prices in addition to the continuous decreases in prices of electrical machinery and materials. Consumer prices are weakening owing mainly to the decline in prices of imported products and their substitutes.