Singapore’s headline CPI inflation edged lower to 4.0% y/y (0.9% m/m) in Aug from 4.1% y/y (-0.2% m/m) in Jul, with the y/y print in-line with Bloomberg consensus but lower than UOB’s estimate of 4.3% y/y.  

Core inflation (which excludes private transport and accommodation) moderated to 3.4% y/y (0.1% m/m) in Aug, from 3.8% y/y (0.2% m/m) in Jul, with the y/y reading below Bloomberg consensus of 3.5% y/y and UOB’s forecast of 3.6% y/y.  

Our Inflation Outlook – We maintain our 2023 headline inflation forecast at 4.7% and core inflation forecast at 4.0%. Excluding the effects of the GST increase, we expect headline inflation to average 3.7% and core inflation to average 3.0% in 2023, both still above the “standard” 2% objective. Risks to inflation remain on the upside given the recent food supply shocks on climate-related events and export restrictions and levies imposed by India as well as the recent surge in global oil prices.