SINGAPORE: Singapore’s core inflation fell to 1.9 per cent year-on-year in November from 2.1 per cent in October.
The easing was mainly due to a moderation in food and services inflation, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said on Monday (Dec 23).
On a month-on-month basis, core inflation – which excludes accommodation and private transport – was unchanged.
Meanwhile overall inflation increased to 1.6 per cent on-year in November from 1.4 per cent in October, driven by a more gradual decline in private transport costs, which outweighed the fall in core inflation.
On a month-on-month basis, overall inflation – which excludes non-consumption expenditures such as purchases of houses, shares and other financial assets and income taxes – also remained unchanged.
SECTORS
Private transport costs fell at a slower pace, from -2.5 per cent on-year in October to -0.7 per cent on-year in November, due to a smaller decrease in car prices.
Retail and other goods inflation remain unchanged at 0.1 per cent, as a smaller decrease in prices of clothing and footwear was offset by a steeper decline in the prices of personal effects.
Electricity and gas inflation also remained the same at 2.5 per cent, as the price of electricity rose at a similar pace in October and November.
Accommodation inflation edged down from 2.5 per cent to 2.4 per cent on account of a smaller increase in housing rents.
Services inflation slowed from 2.3 per cent to 2.2 per cent due to a smaller increase in holiday expenses and a steeper decline telecommunication services fees.
Food inflation also eased from 2.6 per cent to 2.4 per cent as the prices of non-cooked food and food services rose at a slower pace.
OUTLOOK
MAS and MTI said global energy prices have been relatively have been relatively stable in recent weeks, remaining below the levels a year ago on average.
Meanwhile, the prices of Singapore’s imported manufactured goods have also continued to be on a broad decline, in tandem with the easing of global inflation and the gradually strengthening trade-weighted Singapore dollar exchange rate.
On the domestic front, unit labour costs are projected to rise more gradually alongside moderating nominal wage growth and improving productivity.
“Correspondingly, services inflation, which has been on an easing trend, should slow further over the rest of 2024,” said MAS and MTI.
Core Inflation is expected to remain below 2 per cent (including the one-off effects of the GST) through to end-2024.
It is projected to average 2.5 to 3.0 per cent in 2024 as a whole, before stepping down further to 1.5 to 2.5 per cent in 2025.
Overall inflation is also expected to come in at around 2.5 per cent for the whole of 2024 and average 1.5 to 2.5 per cent in 2025.
“An anticipated pickup in private transport inflation amid the firm demand for cars should be more than offset by lower accommodation and core inflation next year,” MAS and MTI said.
The authorities added that risks to the inflation outlook for 2025 are relatively balanced. Domestically, stronger-than-expected labour market conditions could lead to a slower easing in labour unit cost growth.
“An intensification of geopolitical tensions may lead to higher commodity prices and add to imported costs,” said MAS and MTI.
“Conversely, a significant downturn in the global economy could induce a greater easing of cost and price pressures, causing domestic inflation to come in lower than expected.”