Don't be fooled by inflation dipping to 4.1%

DBS warns that it’s largely base effect at work.

Here's more from DBS:

After months of uncomfortably high (above 5%) inflation, the good news is that inflation is finally going to dip. The headline number for July should print a 4.1% YoY rise, down from 5.3% in June. It’s a massive drop and policymaker may breathe a sigh of relief perhaps. But before taking out the party poppers, it pays to note that it’s largely base effect at work.

COE premiums, rentals and foreign labour cost rose sharply in the second half of last year, creating a high base, which technically will “deflate” the YoY number in the same period this year even if price level remains the same.

Underlying inflationary pressure in the economy is expected to remain high and unfortunately, the bulk of that stem from domestic sources. Non-tradable inflation, the proxy for domestic inflation has been the reason behind the elevated headline inflation.

If policy is aim at targeting inflation, growth will slower further. And growth is already slowing rapidly. The economy dipped into contraction mode in the second quarter amid the external headwinds. Ultimately, the balance of risk has tilted towards growth and there is increasingly more scope for monetary policy accommodation.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia