Singapore core inflation holds in November at same pace

Singapore’s core inflation rose in November at the same pace as the prior month, giving some room for policymakers to focus more on mounting pressures to economic growth.

Core inflation, which excludes private transport and accommodation and is closely watched by the central bank, increased 5.1% from a year earlier for a second straight month, according to a joint statement Friday from the Monetary Authority of Singapore and the Ministry of Trade and Industry. 

That compares with a 5% median forecast in the Bloomberg survey and follows the October reading that had marked the first easing in eight months.

Food items and eating out were costlier than the overall core gauge, while items like household durables and healthcare helped hold back an acceleration.

The all-items consumer price index rose 6.7% from the same time in 2022, compared with a median estimate of 6.5% in the Bloomberg survey. The same pace was reported for the gauge in the previous month.

Singapore’s central bankers, who are scheduled to deliver their next policy decision in April, will be weighing how much more needs to be done to beat back price growth while other monetary policymakers have started slowing the tightening. At the same time, recession risks worldwide will pressure the trade-reliant city-state to focus on sustaining traction in the post-Covid growth recovery.

“Demand conditions in major economies have softened while supply chain frictions have continued to ease,” according to the statement Friday. “Prices of energy and food commodities have come off the peaks reached earlier in the year, but remain firm given ongoing supply constraints.”

Both at home and abroad, MAS and MTI see still-strong wage growth adding price pressures. The cost of utilities in Singapore also is “likely to remain elevated.”

Policymakers expect all-items inflation to average 6% this year, and MAS core inflation to be around 4%. In 2023, headline and core inflation are seen averaging 5.5%–6.5% and 3.5%–4.5%, respectively.

Nine in 10 Southeast Asians say they’ve cut back on spending in response to high inflation, according to a survey across the region’s top six economies by Blackbox Research. Rising interest rates were pinned as the greatest financial problem for Southeast Asians, at 21%, with household purchasing costs at a close second, 19%. In Singapore, more than one-third of respondents said they were eating out less these days. – BLOOMBERG