Although the healthcare industry is not spared from a high inflationary environment, especially with labour and higher energy costs, Tan says the pricing power of healthcare service providers could offset the inflationary cost pressures given that demand for healthcare is seen to be price inelastic.
Healthcare is a “beneficiary” during periods of high inflation, says DBS Research analyst Rachel Tan in her healthcare industry report dated Aug 16.
Given the global supply disruptions and ongoing geopolitical tensions, Singapore’s consumer price index (CPI) spiked from 2.29% in 2021 to 6.7% in June 2022 — a level not seen in “a long while”, she says.
