Inflation could be lower than 4% in August

But learn why there'd be nothing to cheer about it if ever.

Inflation for Aug12 are due this week. DBS expects that the headline price barometer may read 3.8% YoY, down from 4.0% in the previous month.

While policymaker may breathe a sigh of relief, DBS said that it pays to note that it is largely base effect at work.

"Although the hikes in foreign worker levies remain in place, the COE premiums and housing rentals appear to have stabilized in the last 1-2 months. This will certainly cool inflationary pressure. And with growth slowing rapidly, with risk of a technical recession looming, the decline in inflation will no doubt tilt the balance for monetary policy easing in the forthcoming meeting in October. We expect the MAS to adopt a more gradual pace of appreciation by reducing the slope of the Sing NEER policy band," it said in a report.