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Quick takes: Pick-up in Singapore core inflation in September

Friday, October 23, 2015 - 16:04
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Singapore's core inflation picked up in September, rising to 0.6 per cent - higher than August's 0.2 per cent, and the market's projection of 0.4 per cent.

SINGAPORE'S core inflation picked up in September, rising to 0.6 per cent - higher than August's 0.2 per cent, and the market's projection of 0.4 per cent.

The higher reading was mostly due to a stronger pick-up in the prices of consumer services and retail items, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) on Friday.

Here's what private-sector economists had to say about the data:

Citi economists Kit Wei Zheng and Yap Kim Leng: "The tone of the September CPI (consumer price index) report reflects the MAS's latest downshifted growth expectations, yet at the same time signals that core inflation is expected to rise, albeit gradually. This nuanced assessment underpinned the calibrated easing via 'slight' slope reduction in October."

ANZ economist Ng Weiwen: "On the inflation front, there will be some increase in inflation once the effects of low commodity prices and the budgetary measures dissipate. But to us, the risk is for further weakness in near-term inflation, with any rise next year not likely to head towards long-term average levels, especially if the growth outturn remains sub-trend."

Barclays economists Leong Wai Ho and Angela Hsieh: "We continue to believe the MAS will look through the softness in headline inflation. Core inflation also bottomed out in May and, in our view, is also set to trend higher next year as the administrative distortions fade away. As such, we maintain our 2015 forecasts for headline and core inflation of -0.5 per cent and 0.5 per cent, respectively."

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