SINGAPORE- Singapore’s key consumer price gauge rose 2.7 percent  in August from a year earlier, higher than economists’ forecasts, official data showed on Monday, the final inflation reading before the next review of monetary policy settings.

The core inflation rate, which excludes private road transport and accommodation costs, was above both a 2.6 percent  forecast in a Reuters poll of economists and a rate of 2.5 percent  in July.

The headline inflation measure in August was up 2.2 percent  from the same month last year, close to a 2.15 percent  forecast in the poll.

Inflation in the Asian financial hub has cooled from a peak of 5.5 percent  in early 2023, and dropped below 3 percent  in June. July’s 2.5 percent  was the smallest annual increase in the core price index since February 2022.

The Monetary Authority of Singapore (MAS) has not changed policy since a tightening in October 2022. Its next policy review is next month at a date yet to be announced.

OCBC economist Selena Ling expects the central bank to maintain its monetary policy stance.

“Core inflation rebounded a bit but the MAS statement suggests no alarm as it still expects core inflation to generally subside over time,” she said.

The trade ministry adjusted its GDP growth forecast range for 2024 last month to 2.0 percent  to 3.0 percent , from 1.0 percent  to 3.0 percent  previously, after the economy posted stronger-than-expected second quarter growth.

Earlier this month, economists polled by the central bank upgraded their expectations for Singapore’s growth to 2.6 percent  this year, up from a forecast of 2.4 percent  in surveys done in March and June.

A majority of the economists surveyed by MAS did not expect any change in policy settings at the central bank’s review in October. They expect the city-state’s economy to grow by an annual 2.6 percent in the third quarter of this year.

The September survey showed economists had lifted expectations for 2024 growth in finance and insurance, construction, wholesale and retail trade sectors.

The median forecast for headline inflation for 2024 was 2.6 percent, down from 2.8 percent in the previous June survey. The median forecast for core inflation was 2.9 percent, down slightly from 3.0 percent from the previous survey.

Core inflation fell to 2.5 percent in July, the smallest annual increase in more than two years. The central bank expects core inflation to ease more significantly in the final quarter of this year and has forecast core inflation at 2.5 percent to 3.5 percent this year.

Singapore’s economy grew 2.9 percent in the April-June quarter from a year earlier, matching the official advance estimate and above market expectations, government data showed on Tuesday.

The trade ministry said it had adjusted its GDP growth forecast range for 2024 to 2.0 percent to 3.0 percent, from 1.0 percent to 3.0 percent previously.

Economists in a Reuters poll forecast growth of 2.7 percent for the second quarter.

On a quarter-on-quarter, seasonally adjusted basis, GDP expanded 0.4 percent in the April to June period, also matching the advance estimate.

“On balance, Singapore’s external demand outlook is expected to be resilient for the rest of the year,” the trade ministry said, though it noted downside risks remained from any intensification of geopolitical and trade conflicts or if global financial conditions stayed tighter for longer than expected. “Against this backdrop, Singapore’s manufacturing sector is expected to see a gradual recovery in the second half of the year,” the ministry said.