Singapore: Inflation lost momentum in March – UOB

Senior Economist at UOB Group Alvin Liew reviews the latest inflation figures in Singapore.

Key Takeaways

“Headline and core CPI inflation eased and further converged in Mar 2023. Headline CPI rose by 0.5% m/m NSA, from 0.6% in Jan. Despite the m/m increase, CPI inflation rose at a slower pace of 5.5% y/y in Mar (from 6.3% in Feb). Similarly, core inflation (which excludes accommodation and private road transport) rose sequentially in Mar by 0.2% m/m (after staying flat in Feb at 0.0% m/m). Core inflation, like the headline, also eased noticeably in Mar despite the sequential increase, coming in at 5.0% y/y (from 5.5% y/y in Feb).”

Inflation Outlook – The MAS kept its inflation forecasts (that were first made in the 14 Oct 2022 MPS) unchanged in today’s Mar CPI report, just as it did in the recent Monetary Policy Statement release (14 Apr). The central bank stated that “MAS Core Inflation will stay elevated in the next few months, as accumulated business costs continue to feed through to consumer prices”, and it also expected core inflation “to slow more discernibly in the second half of this year.”  The MAS also noted both upside and downside risks to inflation (versus just upside risks previously in the Feb 2023 CPI report). We continue to expect headline inflation to average 5.0% and core inflation to average 4.0% in 2023. Excluding the 2023 GST impact, we expect headline inflation to average 4.0% and core inflation to average 3.0%.”

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