Singapore Inflation rises above forecasts
2023.02.23 02:59
Singapore Inflation rises above forecasts
By Ray Johnson
Budrigannews.com – According to data released on Thursday, consumer inflation in Singapore increased in January and is anticipated to continue rising in the coming months due to high import costs, a tight labor market, and strong local demand.
However, after the Monetary Authority of Singapore (MAS) significantly tightened policies over the past year, inflation grew in the month at a slightly slower rate than anticipated.
In January, the Consumer Price Index (CPI), which does not include personal transportation and lodging costs, increased 5.5 percent year-over-year, which was higher than the 5.1 percent seen in January but lower than the 5.6 percent forecast. The reading is the MAS’s preferred inflation indicator.
The MAS released a statement stating that core inflation increased by 0.8% from the previous month.
The year-over-year rate of growth was 6.6% in January, which was higher than the 6.5% reading in December but lower than the 7.1% growth that had been anticipated.
The country’s heavy reliance on food and fuel imports was largely to blame for the continued rise in price pressures. Like most economies that rely on imports, Singapore is still reeling from the disruptions brought on by Russia’s invasion of Ukraine.
However, by maintaining robust demand, a tight local labor market and robust wage growth have also driven inflation increases. The MAS predicted that core inflation would rise above 5% in the first quarter of 2023 and that this pattern is likely to continue in the coming months.
According to a statement released by the MAS, “(Inflation) will remain elevated in H1 2023 before slowing more distinctly in H2 2023 as the current tightness in the domestic labor market eases and global inflation moderates.”
The MAS also projects core inflation between 3.5 and 4.5 percent in 2023, with a 1% increase in Singapore’s Goods and Services tax adding to the pressure.
In addition, the financial authority drew attention to the upside inflation risks posed by heightened local demand and increased shocks in the commodity market.
The reading of inflation had little effect on the.
