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Singapore's inflation outlook stays unchanged: MAS

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Singapore's official inflation forecasts remain unchanged, said the Monetary Authority of Singapore (MAS) on Tuesday morning - quashing some private-sector economists' concerns that 2015 inflation could come in weaker than expected.

SINGAPORE's official inflation forecasts remain unchanged, said the Monetary Authority of Singapore (MAS) on Tuesday morning - quashing some private-sector economists' concerns that 2015 inflation could come in weaker than expected.

This means headline inflation is still projected to come in at -0.5 to 0.5 per cent, and core inflation at 0.5 to 1.5 per cent.

"MAS Core Inflation and CPI-All Items inflation are expected to ease further before rising towards the end of the year and into 2016, as global oil prices pick up and the effects of the reduction in healthcare costs fade," said the central bank.

"At the same time, the labour market will be tight. The risk remains that underlying cost pressures in the economy could mount, leading to a stronger pass-through to consumer prices over the medium term."

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Headline inflation fell to -0.3 per cent year-on-year in the January to February period, from 0 per cent in Q4 2014.

Said MAS: "For 2015 as a whole, global oil prices are likely to average significantly below the US$93 recorded in 2014, while domestic food inflation should also be lower. Although underlying cost pressures stemming from the tight labour market remain, the pass-through to consumer prices could continue to be constrained in the near term by the moderate growth environment."

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