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Singapore inflation eased 0.8 per cent in August compared to a 0.4 per cent slide in July, mainly due to the lower cost of private vehicles as the Certificate of Entitlement (COE) premiums eased.
MAS Core Inflation, which excludes the costs of accommodation and private road transport, moderated to 0.2 per cent from 0.4 per cent in July, reflecting lower services and retail goods inflation.
Here are some quick thoughts:
Weiwen Ng, economist (ASEAN and Pacific) at ANZ Research:
"Core inflation eases in line with our expectations, but does little to assuage MAS' conundrum. Easing monetary conditions may appear to be an attractive orthodox policy when the MAS next meets in October, particularly with growth undershooting and core inflation still benign (for now)."
"However, an easing in S$NEER would exacerbate the extent of rate rises, resulting in higher debt-servicing costs for households. This dynamic, in addition to MAS' focus on cost pressures arising from a tight labour market, would constrain MAS's policy response."