Conflict raises inflation and growth risks 11/03

With Russia and Ukraine accounting for about 30 per cent of global exports of wheat and 20
per cent of corn, the prices of these staples have also soared and are likely to remain
elevated at least as long as the war continues. The prices of some base metals, of which
Russia is a major exporter, have also risen.

The resulting inflationary impact is already being felt in Singapore. The price of 95-octane
petrol, for instance, has risen about 16 per cent since mid-February and many food prices
have also shot up. The increases will inevitably ripple through the economy and be reflected
in higher bills for electricity, groceries and cooked meals for consumers, as well as input
costs and freight charges for companies - which in turn will push up prices of other goods.
This cycle of inflation will only get worse as more sanctions pile up.

I hope that the government could continue providing cushioning measures to ensure that
Singaporeans are able to transit with inflation ongoing, through food vouchers and more
utilities rebates especially for those in the lower-income groups.

With the current trend of sanctions piling up against Russia, there might be a global
economic slowdown. Hence, the Singaporean government should be prepared for the worst
outcome.