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October's headline inflation eases to 6.7% while core inflation eases to 5.1%

Felicia Tan
Felicia Tan11/23/2022 01:00 PM GMT+08  • 2 min read
October's headline inflation eases to 6.7% while core inflation eases to 5.1%
For 2022, CPI-All Items inflation is expected to average around 6.0% while MAS Core Inflation is expected to average around 4.0%. Photo: Bloomberg
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Singapore’s CPI-All Items inflation eased to 6.7% y-o-y in October, down from the 7.5% y-o-y print in September.

At the same time, the Monetary Authority of Singapore (MAS) Core Inflation edged down to 5.1% y-o-y in October, down from September’s reading of 5.3% y-o-y.

The moderation came amid the smaller increases in electricity & gas, retail & other goods and services.

The lower headline inflation was due to the ease in private transport inflation as well lower inflation across all the broad categories, with the exception of accommodation and food.

Accommodation inflation stood unchanged amid the steady pace of increase in housing rents, while food inflation increased due to higher inflation for food services.

Meanwhile, private transport inflation fell due to the slower pace of increase in car and petrol prices.

See also: Singapore may need to re-evaluate tax incentives in post-BEPS 2.0 world: Deloitte

Electricity & gas inflation eased on the back of smaller increases in electricity and gas tariffs.

Inflation for retail & other goods fell as prices for clothing and footwear as well as other personal care products rose at a slower pace.

Services inflation dipped slightly as there were smaller increases in holiday expenses and recreational & other cultural services costs.

See also: Analysts expect Singapore's industrial production to remain soft in 1Q2023

On a m-o-m basis, CPI-All Items declined by 0.4% while core CPI increased by 0.1%.

In its outlook statement, MAS and the Ministry of Trade and Industry (MTI) are projecting Singapore’s MAS Core Inflation to “stay elevated” in the next few quarters before slowing “more discernibly” in the second half of 2023.

This comes as the “current tightness in the domestic labour market eases and global inflation moderates”.

For 2022, CPI-All Items inflation is expected to average around 6.0% while MAS Core Inflation is expected to average around 4.0%.

Headline and core inflation are expected to average between 5.5%-6.5% and 3.5%-4.5% respectively taking into account factors including the increase in goods and services tax (GST).

“Excluding the transitory effects of the GST hike, headline and core inflation are expected to come in at 4.5%–5.5% and 2.5%–3.5%, respectively,” say MAS and MTI in their Nov 23 release.

“There are upside risks to the inflation outlook, including from fresh shocks to global commodity prices and more persistent-than-expected external inflation,” they add.

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