Singapore’s core, headline inflation both rise to higher-than-expected 1.2% in October
MAS and MTI maintain their outlooks
[SINGAPORE] Both core and headline inflation rose to a higher-than-expected rate in October. But the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) maintained their forecasts, even as they continued to note the uncertain outlook on Monday (Nov 24).
Core inflation, which excludes accommodation and private transport, was 1.2 per cent in October, up from 0.4 per cent in September. This was due to higher inflation in services, food, and retail and other goods, MAS and MTI said.
Private-sector economists’ median forecast had been for core inflation to reach 0.7 per cent, according to a Bloomberg poll.
Headline inflation, at 1.2 per cent in October, was also higher than September’s 0.7 per cent. Bloomberg economists had a median forecast of 0.9 per cent for headline inflation.
On a month-on-month basis, the core consumer price index (CPI) grew 0.5 per cent, while the all-items CPI was unchanged.
MTI and MAS kept their 2025 full-year forecast ranges at 0.5 per cent for core inflation, and 0.5 to 1 per cent for headline inflation.
The wording of their outlook statement was nearly identical to that of the previous month.
The Republic’s imported costs should continue to decline – albeit at a slower pace – in the months ahead, they said. They noted that global crude oil prices in particular are expected to fall more gradually next year compared with 2025, while regional inflation “should pick up modestly after their weak outturns this year”.
Domestically, “administrative factors” that are temporarily dampening inflation are expected to continue tapering over the coming quarters, MAS and MTI added. They expect unit labour costs to begin to increase as productivity growth normalises, and for private consumption demand to remain steady.
But uncertainties remain. The authorities believe that supply shocks, including those due to geopolitics, could abruptly lift imported costs.
A sharper-than-expected weakening in global demand could also keep core inflation lower for longer.
“Another significant decline in global oil prices could also temporarily tamp down the pace of price increases,” they added.
Key CPI categories
In October, there was higher inflation in most CPI categories.
Services inflation reached 1.8 per cent, up from September’s 0.3 per cent, due to a faster pace of increase in health insurance costs, as well as a rise in healthcare services costs and holiday expenses.
Food inflation edged higher to 1.2 per cent, compared with 1.1 per cent in the preceding month. This was on the back of a faster increase in non-cooked food prices.
Retail and other goods prices increased to 0.4 per cent in October, marginally higher than 0.3 per cent in September. This was on account of a rise in the prices of clothing and footwear, as well as personal effects.
Private transport inflation ticked up to 3.8 per cent from 3.7 per cent before, due to a steeper increase in car prices.
Accommodation inflation, on the other hand, eased to 0.3 per cent from 0.4 per cent previously, as a result of smaller increases in housing rents.
Electricity and gas prices fell by 4 per cent, less steeply than 5.8 per cent in September, due to a smaller decline in electricity prices.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
