HomeNewsBeritaBusinessLifestyleOpinionWorldSportsPropertyEducationCarzillaGalleryVideosAccelerator

Singapore November core inflation signals subdued demand

-

Key consumer price gauge slowed to 3.2% on-year as all-items inflation comes in at the lowest in 25 months.

6
Shares
Total Views: 8,128
Free Malaysia Today
Despite recent economic gains, risks persist from China’s challenges and potential supply shocks over Red Sea attacks on shipping. (AP pic)

SINGAPORE:
Singapore’s core inflation edged lower in November, giving the central bank room to extend its monetary-policy pause next month to support the economy.

Official data showed core inflation quickened 3.2% from a year ago, in a sign of subdued consumer demand. That matched the median estimate in a Bloomberg survey of economists and compared with the 3.3% pace in October.

“This was driven by lower inflation for retail and other goods, food, as well as electricity and gas,” according to a joint statement from the Monetary Authority of Singapore and the ministry of trade and industry.

The core measure, which excludes private road transport and accommodation, is the print monitored by MAS to determine policy settings. The central bank’s next monetary decision is due in late January.

Key highlights from the price print:

  • All-items inflation cooled to 3.6% from a year earlier, compared with the 3.9% survey estimate; that’s the lowest in 25 months
  • Core prices climbed 0.1% from the prior month, while the all-items gauge dipped 0.2% from October

The MAS, which uses the exchange rate as its main tool, kept its policy stance unchanged at its two scheduled reviews this year after tightening settings five times between October 2021 and 2022.

While maintaining the Singapore dollar’s nominal effective exchange rate or S$NEER on an appreciating path has helped offset imported inflation, the central bank still needs to balance its price stability goal with economic growth.

Despite recent gains in exports, manufacturing output and electronics PMI, risks to the outlook remain in the form of China’s struggles to stabilise economic growth and supply shocks from any widening of geopolitical conflicts, like the Red Sea attacks on shipping.

Singapore’s government earlier narrowed its growth forecast for this year to 1%, while expecting expansion in 2024 to be between 1% and 3%. It cautioned

To respond to evolving economic challenges, the MAS has opted to revisit policy settings quarterly beginning next month.

Other details

Stay current - Follow FMT on WhatsApp, Google news and Telegram

  • Food inflation eased to 4% on-year from 4.1% in October
  • Retail and other goods inflation cooled to 1% from 1.6% the prior month
  • Transport inflation cooled to 2.8% year-on-year, as car prices rose at a much slower pace, according to the Department of Statistics Singapore
  • MAS and the MTI retained their view of core inflation averaging around 4% this year, while they see the all-items index averaging at around 5%
  • For 2024, the core gauge is forecast to average 2.5%–3.5% and the broader measure to be in a range of 3%-4%
  • Separate data showed factory output rose 1% on-year in November after a revised 7.6% expansion in the previous month

Subscribe to our newsletter and get news delivered to your mailbox.