Singapore’s Senior Minister Tharman Shanmugaratnam said on Tuesday that recession is the “price we pay” for misreading inflationary pressures and the ongoing spell of weakness in the global economy was due to central banks worldwide over-betting “on the wrong side” of inflation.
The minister made the statement at the Bloomberg New Economy Forum in Singapore and comes in the backdrop of central banks aggressively hiking policy rates to tackle inflation.
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The headline CPI in the U.S. for October came in at 7.7% versus 8.2% in September. The SPDR S&P 500 ETF Trust SPY gained over 3% in the last five days, while the Vanguard Total Bond Market Index Fund ETF BND lost 0.32%.
The Monetary Authority of Singapore was among the earliest central banks to commence tightening its policy in October last year and has since delivered five moves to rein in inflation, according to the Bloomberg report.
Tharman said the challenge now is to increase investment and sustain it at higher levels for longer.
“The scale of investment required is one that can only be delivered through public-private partnerships at a level” that’s never been contemplated before, he said.
On U.S.-China: The Minister also commented on U.S.-China relationships saying easing tensions between the two countries won’t assure the world of peace, but it will definitely make it a safer place.
Even with ties restored, there would be constant friction between the world’s two biggest economies, Tharman said, adding that “it’s much safer than a world that is decoupled.”
Photo by IMF on Flickr
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