Singapore’s CPI-All Items inflation – or headline inflation – fell to 3.6% y-o-y in November, lower than the 4.7% y-o-y print in October. The drop was mainly due to lower private transport inflation.
The Monetary Authority of Singapore (MAS) core inflation fell to 3.2% y-o-y in November, slightly lower than the 3.3% y-o-y reading in October as inflation for retail & other goods, food, as well as electricity & gas slowed down.
Private transport inflation fell as car prices rose at a much slower pace. Accommodation inflation also moderated as the pace of increase in housing rents slowed slightly.
Retail & other goods inflation declined as prices of medical goods and household durables fell. At the same time, there was a smaller increase in the prices of personal care products.
Food inflation edged down as prices of prepared meals rose at a slower rate.
Electricity & gas inflation was down due to a small increase in electricity costs.
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Services inflation rose slightly as the costs of outpatient services, recreational & cultural services and telecommunication services rose at a faster pace. Airfares saw a smaller decline during the month.
Looking ahead, the MAS and the Ministry of Trade and Industry (MTI) note that Singapore’s import cost pressures should ease in the quarters ahead due to the continued fall in global prices for most food commodities, as well as intermediate and final manufactured goods along with the stronger Singapore dollar (SGD) trade-weighted exchange rate.
For 2023, headline inflation is expected to average around 5% while core inflation is expected to come in around 4%, unchanged from the MAS and MTI’s previous estimates. However, headline inflation could remain volatile in the near-term amid the recent swings in certificate of entitlement (COE) premiums.
In 2024, headline and core inflation are projected to average 3.0% – 4.0% and 2.5% – 3.5%, respectively. The slowdown in headline inflation is due to a slower inflation in private transport with an expected increase in COE quotas. Accommodation inflation is also projected to ease as the supply of completed housing units increases.
Excluding the transitory effects of the one percentage point increase in the GST rate to 9%, headline and core inflation are expected to come in at 2.5% – 3.5% and 1.5% – 2.5%, respectively.
