growth of the derivatives market, has parceled out risks more widely and perhaps more evenly in the system. but it also makes the system less predictable in the event that things go wrong. we cannot predict how contagion will spread in global markets. it is critical that the hard lessons on corporate governance learnt during the fall out from the asian crisis are not lost during the current period of benign economic growth and relatively easy availability of funds. when the flight to safety and quality occurs, it will be those countries and companies with robust standards of corporate governance that will be better placed to keep the loyalties of investors. corporate governance developments in the region we should therefore keep up the momentum of progress. since the crisis, the asian roundtable countries have indeed made substantial progress in important areas of corporate governance reform. i will run through two key areas of progress very briefly. growth and strengthening of standard - setting bodies institutions matter. several countries in asia have established national committees on corporate governance since the crisis. the private sector has also strengthened its act. we have seen a number of institutes of directors set up in many countries, including china, hong kong, indonesia, south korea, malaysia, thailand and the philippines. minority shareholder watchdog groups are also now in place in countries such as malaysia, south korea and taiwan. and institutes of directors, in particular, now play a key role in developing training programmes for both directors and management. in some countries – for example, malaysia and thailand, such training programmes have become a mandatory prerequisite for directors of listed companies. so we have seen a strengthening of both public and private bodies aimed at the common objective of scaling up standards of corporate governance. corporate governance regulations and best practices we have seen considerable reform in the regulations and codes of corporate governance, as well as the actual practice of corporate governance in the asian roundtable economies. for instance, pakistan, chinese taipei and thailand all adopted new codes in 2002, while new or updated codes have been adopted in bangladesh, hong kong, indonesia and korea since 2003. this has yielded visible benefits. there is greater clarity in many asian economies regarding the fiduciary duties of the directors of listed companies. there has also been progress made in terms of more independent directors being introduced to the boards of listed companies in the asian region. accounting rules have also been beefed up across the region. some of the asian roundtable countries have made significant moves towards convergence with international standards and best practices on accounting. china, india, indonesia

year gdp growth remains at 4 - 6 %. given the uncertainty in the external environment, we will be carefully monitoring the incoming data. 5. cpi inflation came in at 7. 5 % in june, bringing the average for the first six months of this year to 7. 1 %. global oil prices had surged towards the end of may, reaching a high of us $ 147 per barrel ( wti ) in mid - july. though they have pulled back slightly, prices are currently around us $ 125, up from us $ 98 in q1 this year. our major trading partners are also facing a rise in inflationary pressures, as fuel subsidies were partially lifted in some of these countries. apart from oil, food prices are expected to remain elevated, even as the rate of increase moderates. 6. these external developments – higher oil prices, continued high prices of food, and inflationary pressures in our trading partners – have affected singapore because of our openness and heavy dependence on imports. we are thus revising our cpi inflation forecast for this year to 6 - 7 %, compared to the earlier estimate of 5 - 6 %. given the outcome in the first half of the year, the new forecast range implies that headline cpi inflation is expected to come down over the rest of the year. there are several reasons for this : • first, the one - off impact of the gst hike will cease to affect headline inflation in july. • second, although global commodity prices are likely to remain high, any further price increases are expected to be milder, compared to the first half of the year. • third, there are early signs of an easing of domestic cost pressures as the economy slows and asset markets consolidate. the rate of increase in commercial rentals, for example, appears to have peaked. recent employment surveys have also shown that employers have become more cautious about hiring, suggesting that the pressures on the labour market could ease. • fourth, mas had pursued a policy of targeting an appreciation of the singapore dollar nominal effective exchange rate ( s $ neer ) since 2004. in a pre - emptive move, mas further undertook a tightening of monetary policy in october 2007 and april 2008, even as there were heightened concerns over developments in the us economy. 7. between april 2004 and june 2008, the s $ neer appreciated by 12. 2 %. against the us $, the s $ appreciated by 23. 4 %. the policy moves have had a clear restraining effect on