Singapore: Inflation rose to 8y highs in October – UOB

Senior Economist at UOB Group Alvin Liew comments on the latest release of inflation figures in Singapore.

Key Takeaways

“Singapore’s consumer prices jumped to 3.2% y/y (0.3% m/m NSA) in Oct from 2.5% y/y (0.4% m/m) in Sep, versus Bloomberg median forecasts of 2.9% y/y (0.0% m/m), the fastest y/y increase since March 2013. Meanwhile, core inflation (which excludes private road transport and accommodation prices) also rose by a faster 1.5% y/y in Oct, above Sep’s 1.2% and the Bloomberg median estimate of 1.4%. Accounting for the latest data, Singapore’s headline inflation averaged 2% while core inflation averaged 0.7% in the first ten months of 2021.” 

“According to the joint Oct 2021 CPI report release by the Monetary Authority of Singapore (MAS) and the Ministry of Trade & Industry (MTI), headline inflation is ‘forecast to come in around 2%’ in 2021 and average 1.5% - 2.5% in 2022, while core inflation is expected at the ‘upper end of the 0-1% forecast range’ in 2021, before increasing further to 1 – 2%.”

“We keep our headline inflation outlook to 2.0% for 2021, while holding our core inflation outlook unchanged at 1.0%. More importantly, the higher Oct inflation print and the anticipation of further inflation pressures (which is no longer “transitory” as previously thought) due to global and domestic factors, vindicates the tightened monetary policy stance by the MAS in its October 2021 policy meeting.”