CPI-All items inflation – or headline inflation – has eased to 1.4% on a y-o-y basis in October, from 2% in September. The lower headline inflation was due to slower accommodation inflation and a sharper drop in private transport costs.
Monetary Authority of Singapore (MAS) core inflation, which excludes accommodation and private transport, declined to 2.1% on a y-o-y basis, down from the 2.8% y-o-y print in September. The easing in core inflation was attributed to a moderation in inflation for services, electricity & gas as well as retail & other goods.
Services inflation fell mainly due to smaller increases in the costs of holiday expenses and healthcare services. Electricity & gas saw a moderation in inflation as the price of electricity and gas rose at a slower pace. Retail & other goods inflation eased mainly from the drop in clothing and footwear prices as well as lower prices for medicines and health products.
Headline inflation and core inflation both fell by 0.3% on a m-o-m basis.
The MAS and Ministry of Trade and Industry (MTI) have kept their guidance with core inflation expected to reach around 2% by the end of 2024 and average between 2.5% to 3% in 2024. Core inflation is expected to drop to 1.5% to 2.5% in 2025.
At the same time, the ministries except accommodation inflation to come in lower in 2025 as leasing demand moderates. This should offset a pickup in private transport inflation amid still-firm demand for cars. With this, headline inflation is expected to come in around 2.5% for 2024 and at an average range of 1.5% to 2.5% in 2025, unchanged from September’s outlook.
See also: Analysts maintain positive outlook on manufacturing sector in 2024 despite slowdown in IP
MAS and MTI continue to see risks to its inflation outlook as “relatively balanced”.
