China’s decision to allow electricity prices to rise to ease an ongoing power crunch could potentially have a larger impact on the global economy than the Evergrande debt crisis, with the consequences felt in Singapore, too.
OCBC Bank economist Howie Lee said that unlike Evergrande, whose impact will likely be controlled, a power shortage due to insufficient supplies of coal and natural gas is much harder to manage.
Higher electricity prices would add to inflation pressures, for example, and exacerbate delays in deliveries of materials essential to global supply chains. That, in turn, will have an impact on output, corporate earnings and even jobs.
This story is from the October 13, 2021 edition of The Straits Times.
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This story is from the October 13, 2021 edition of The Straits Times.
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