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Singapore’s headline inflation increases to 4.1% y-o-y; core inflation eases to 3.0% in September

Felicia Tan
Felicia Tan • 3 min read
Singapore’s headline inflation increases to 4.1% y-o-y; core inflation eases to 3.0% in September
The country’s core inflation is projected to range between 2.5% to 3.0% y-o-y by December, say MAS and MTI. Photo: Bloomberg
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Singapore’s headline inflation stood at 4.1% y-o-y in September, up from 4.0% in August, due to higher private transport prices.

Meanwhile, Monetary Authority of Singapore (MAS) core inflation, which excludes accommodation and private transport, eased to 3.0% on a y-o-y basis, down from 3.4% in August. The lower core inflation was due to lower inflation for food and retail & other goods.

In September, transport saw the highest y-o-y increase at 6.3% among the rest of the sectors due to a faster pace of increase in car prices and higher petrol prices.

At the same time, accommodation inflation edged down as the pace of increase in housing rents moderated.

In its outlook statement, the MAS and the Ministry of Trade and Industry (MTI) are expecting core inflation to range between 2.5% to 3.0% by December.

In early 2024, however, the country’s core inflation is expected to be impacted by the higher GST as well as “seasonal effects”.

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“However, core inflation should resume a broadly moderating trend over 2024, as import cost pressures decline and tightness in the domestic labour market continues to ease,” say MAS and MTI.

Meanwhile, headline inflation is expected to rise further in the coming months due to higher certificate of entitlement (COE) premiums. Nonetheless, private transport inflation should slowly moderate over the course of next year alongside an expected increase in COE quotas.

Inflation for accommodation is also projected to ease as the supply of completed housing units increases.

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This time, the MAS and MTI estimated that 2023’s inflation is expected to average around 5% while MAS core inflation is expected to come in at around 4%.

In August, the government kept to its estimated range of 4.5% to 5.5% for headline inflation and 3.5% to 4.5% for core inflation.

It added, in its August statement, that headline inflation was expected to come in at around 3.5% to 4.5% while core inflation was expected to come in at around 2.5% to 3.5% excluding the transitory effects of the GST increase, which now stands at 8%.

In 2024, headline and core inflation are projected to average 3.0–4.0% and 2.5–3.5% respectively. Excluding the transitory effects of the 1%-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, says the government.

“Upside risks remain, including from fresh shocks to global energy and food commodity prices due to geopolitical conflicts and adverse weather events, and more persistent-than-expected tightness in the domestic labour market. At the same time, there are also downside risks such as a sharper-than-projected slowdown in the global economy, which could induce a greater easing of cost and price pressures,” say MAS and MTI.

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