SONY Corp President Ryoji Chubachi warned yesterday that stagflation - slowing economic growth and quickening inflation - in the US, Europe and Japan is beginning to undermine consumer demand in Asia.

"Our concern is that consumers' buying power is decreasing." Chubachi said at a news conference in Singapore at the opening of a lithium-ion battery plant, its first battery factory in Southeast Asia. "If this situation continues long-term, it would affect Sony," he said.

Sony said last month its April-June profit plunged by about half from a year ago, in part because of slowing electronics sales growth.

Chubachi said demand for Sony televisions jumped ahead of this month's Olympic Games in Beijing and that the Tokyo-based electronics giants' computers, appliances and mobile phones also remain popular.

Sony invested S$150 million (US$106 million) in the Singapore plant, which will produce 8 million battery units a month for mobile phones by 2010 and employ 500 workers. Rechargable lithium-ion batteries, now common in cell phones and laptops, produce more power and are smaller than nickel-metal hydride batteries.

The factory is part of US$370 million expansion to boost Sony's battery production by 80 percent to 74 billion units a month by 2011.