PRICES of children’s clothing in Singapore rose 11.6 per cent year on year (yoy) in September. Electricity costs increased 26.5 per cent, and chilled poultry prices 38.6 per cent. With prices rising at their fastest pace in 14 years, it may be difficult to feel optimistic. But stealthy signs are emerging that inflation has likely crested, which would mean huge relief for the economy, the Straits Times Index and global stocks. Consider the following realities, then draw your own conclusions.

Start with energy, a chief inflation driver globally. Singapore CPI (consumer price index) was up 7.5 per cent yoy in September. But this was its third straight month-on-month slowdown, thanks partly to cooling energy costs. Petrol prices are down 16 per cent. Falling energy costs have also slowed US inflation since June. Oil is down 25.2 per cent since its March high. American petrol prices bounced in early October, but remain 25 per cent below their mid-June highs. Energy contributed over a third of the eurozone’s 10.7 per cent yoy inflation, on fears of winter gas shortages. But storage filled far faster than feared. New import terminals are coming online. Eurozone gas prices, while still elevated, are down sharply from August highs.

Next, food. Russia’s invasion of Ukraine initially caused a spike in global wheat and grain prices. But pressures have tapered off since. In America, wheat is down 31.8 per cent from March highs. The United Nation’s World Food Price Index, down for six straight months, is 14.7 per cent below March’s high.