Singapore’s core consumer price index rose by 1.9% year-on-year in November, marking the smallest increase in nearly three years and falling below economists’ expectations, according to official data released on Monday.
The core inflation rate, which excludes private road transport and accommodation costs, came in lower than the 2.1% forecast in a Reuters poll and the 2.1% rise recorded in October. This is the smallest increase since November 2021, when the rate stood at 1.6%.
Headline inflation, which includes all consumer prices, rose by 1.6% year-on-year in November, below the 1.8% predicted in the poll.
The Monetary Authority of Singapore (MAS) had anticipated core inflation to hover around 2% in the fourth quarter. The slowdown in inflation could provide room for the central bank to adjust its monetary policy in January. However, analysts suggest MAS might delay any easing measures until later in 2025, considering potential policy shifts under the incoming U.S. President Donald Trump.
In October, the MAS maintained its monetary policy settings despite improving growth and declining inflation. This marked continuity since its fifth consecutive policy tightening in October 2022.
In a positive development, the Ministry of Trade and Industry recently raised Singapore’s GDP growth forecast for 2024 to 3.5%, up from the previous 2.0%–3.0% range, following better-than-expected third-quarter growth of 5.4%.
A recent MAS survey revealed that most economists expect the central bank to maintain its current policy stance in the upcoming reviews scheduled for January, April, and July. Meanwhile, about one-third of respondents predict a policy easing in January through a reduction in the slope of the Singapore dollar nominal effective exchange rate, down from half in the previous survey.
