Economist at UOB Group Barnabas Gan reviews the latest inflation figures in Singapore.

Key Takeaways

“Singapore’s consumer prices rose at its fastest rate since Feb 2013 at 4.0% y/y (+0.0% m/m sa) in Jan 2022, due to higher food and oil prices. This is slightly lower compared to market expectations for a 4.2% y/y print, albeit closer to our outlook of 3.9% y/y.”

“Inflation risks are still being felt at this juncture, given that headline inflation has climbed for five straight months. Core inflation has also accelerated to 2.4% y/y in Jan 2022 (from 2.1% prior), marking the second month that core inflation is above the 2.0% handle. The authorities have kept their headline and core inflation outlook unchanged at 2.5 - 3.5% and 2.0 - 3.0% respectively.”

“We expect headline inflation to stay above the 3.0% handle at least into the first half of 2022, while core inflation could remain at 2.0% or higher for the remaining part of the year. Given the inflation risks, we maintain our call for MAS to further normalise monetary policy in April 2022.”