Global inflation risks rising, investors urged to buy scarce assets

Real estate, precious metals, infrastructure, and commodities to work as hedges

- BY NIVETHA DAYANAND Assistant Business Editor

Investors should increase exposure to scarce assets such as real estate, infrastructure, commodities and precious metals as inflation risks build beneath a surface of strong global liquidity, according to DBS Bank Chief Investment Officer Hou Wey Fook.

“One approach is for investors to increase exposure to scarce assets. In an environment where rates are falling and the economy remains out of recession, ample liquidity can allow inflationary pressures to build gradually,” Hou said.

He described scarce assets as those characterised by limited supply and structural imbalances between availability and demand, conditions that historically allow them to outperform traditional financial assets when inflation rises and real yields decline.

The growing focus on real assets reflects a broader shift in global inflation dynamics, which Hou believes is no longer driven primarily by temporary factors such as tariffs or supply disruptions.