Part 4/10:
Inflation: A Sign of a Healthy Economy or a Red Flag?
While moderate inflation can be beneficial—generally targeted at around 2% annually to foster stable economic growth—excessive inflation raises concerns. When prices rise too rapidly, wages often lag behind, eroding purchasing power and creating economic stress for consumers.
In 2022, Singapore projects core inflation to hover between 2.5% and 3.5%. The country’s monetary authority has responded by tightening policies for the third time in six months in an effort to temper inflationary pressures. Similarly, South Korea unexpectedly increased interest rates, aligning with the broader trend of global monetary tightening.