Inflation in Singapore expected to peak in Q4 and stabilise, says DPM Wong

Inflation in Singapore is expected to peak in the next two to four months and will start to ease thereafter, said Deputy Prime Minister Lawrence Wong.

But Wong, who is also Finance Minister, added that the extent of this easing towards the year end and where the new inflation rates will stabilize at are big uncertainties.

Inflation rates here may very well settle at a higher rate given the geopolitical environment, supply chain issues and how economies are transitioning towards becoming more sustainable, said Wong.

He noted that they are not likely to return to the rates Singapore had been used to over the last decade or so, as zero to 1 per cent inflation was a historical anomaly and never used to be so low.

“We will just have to pay that little bit more in order to be greener, in order to have more resilient supply chains, so we have to be prepared for that new equilibrium where inflation is concerned,” said Wong.

Noting that the Monetary Authority of Singapore (MAS) has already tightened monetary policy four times in the last nine months to dampen inflation, Wong said the Government continues to monitor the situation very closely.

Additionally, targeted measures to help the most vulnerable deal with rising prices have also been put in place, including a $1.5 billion support package announced in June to provide immediate relief.

“Some of the measures we have announced are still being rolled out in the coming months,” he said.

“We will continue to monitor the situation, and the assurance we give to everyone in Singapore is that if the inflation situation were to worsen, we will certainly be able to provide more assistance.”

Wong said that economists are looking at what inflation could look like next year and will put out figures in due course. The MAS’ next monetary policy statement is scheduled for October.

Beyond inflation, Wong said the Government is concerned about the increasing risks for economic growth next year too.

“That is something that we are watching carefully too,” he said.

SOURCE: NEWS AGENCIES