SINGAPORE- Singapore’s key consumer price gauge rose 3.4 percent in August, almost matching economists’ forecasts, and easing compared with July’s figures due to lower inflation for services, food, retail and other goods, official data showed on Monday.
The core inflation rate – which excludes private road transport and accommodation costs – climbed 3.4 percent year-on-year in August, almost in line with a forecast in a Reuters poll of economists of 3.5 percent , and lower than the 3.8 percent seen in July.
“Global supply chain frictions have largely eased, and food commodity prices remain below year-ago levels,” said a joint statement by the Monetary Authority of Singapore (MAS) and the trade ministry.
Headline inflation in August was up 4 percent from the same month last year, as forecast in the poll.
“Consumer price inflation in Singapore’s major trading partners has also been on a gradual moderating trend,” the authorities added.
Economists are generally expecting MAS, the central bank, to keep monetary policy settings unchanged in a scheduled review next month, on a weak growth outlook and still-elevated but easing inflation.
Economists have downgraded Singapore’s 2023 growth forecasts and inflation expectations, according to a survey by the country’s central bank, with spillovers from an external growth slowdown cited as the top risk.
The median forecast of 22 economists surveyed by the Monetary Authority of Singapore (MAS) is for Singapore’s economy to grow 1.0 percent this year, down from a forecast of 1.4 percent in June’s survey.
Gross domestic product is projected to expand by 2.5 percent in 2024.
The median inflation forecast is for headline consumer prices to rise 4.7 percent this year, down from 5.0 percent predicted in June. The median forecast for MAS core inflation, which excludes private road transport and accommodation costs, is 4.1 percent, unchanged from the previous survey.
Both headline inflation and MAS core inflation are expected to ease in 2024, to 3.1 percent and 2.8 percent respectively.
The survey was conducted in mid-August, just days after the government slightly cut its economic outlook for 2023 after the country narrowly averted a recession in the second quarter, with weak global demand a key drag on its economy.
About 69 percent of survey respondents cited the impact of a slowdown in external growth as the downside risk to the domestic outlook.
Tighter global financial conditions and rising geopolitical tensions were cited by survey respondents as the main factors that could potentially weigh on financial market and lending conditions in Singapore.
None of the economists is expecting MAS to make any changes to monetary policy in its review next month.
Majority of the respondents expect corporate profitability to decline this year, while more than half see private residential property prices rising. -Reuters
