DPM Lawrence Wong interview with Bloomberg News editor John Micklethwait (August 2022)

DPM Wong: We continue to follow this very closely. The Monetary Authority of Singapore has already taken four steps in the past nine months in monetary policy to mitigate reported inflation. And on top of that, we have all the different relief programs that we’ve extended, focused on low-income and vulnerable groups, because they’re the ones who will be disproportionately affected by rising prices.

Some of the measures we announced are still being rolled out in the coming months. We will continue to monitor the situation, and our assurance to everyone in Singapore is that should the inflation situation worsen, we will certainly be able to provide further assistance. For now, we expect inflation to probably peak around the fourth quarter of this year towards the end of the year, and it will start to subside thereafter. But the big uncertainty is how deep the easing will be and where the new inflation rates will stabilize next.

I think it’s more likely that they won’t stabilize at the rates we’ve all been accustomed to over the last decade or so – zero, one percent inflation. In fact, that in itself was a historical anomaly because inflation rates had never been so low. So it could very well be settling in at a higher pace, especially given the geopolitical environment, the supply chain issues we’re going to face, and the green transition we’re all talking about. We’ll just have to pay a little more to be greener, to have more resilient supply chains, so we have to be prepared for that new inflation equilibrium.

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