Barnabas Gan, Economist at UOB Group, assesses the recently released inflation figures in Singapore.

Key Takeaways

“Singapore’s consumer prices rose 2.5% y/y (+0.4% m/m nsa) in September 2021. This is slightly faster than expected as compared to market (and ours) expectations for a growth of 2.4% y/y (+0.3% m/m sa). The inflation print in September was the fastest year-on-year print year-to-date, suggesting that Singapore’s domestic prices have been accelerating given the higher commodity prices. Accounting for the latest data, Singapore’s inflation averaged 1.8% in the first nine months of 2021.” 

“Similarly, Singapore’s core inflation accelerated to 1.2% in September 2021, the fastest gain since May 2019.”

“As a price-taker, Singapore is vulnerable to imported inflation as commodity prices have been on the rise to-date.”

“Beyond cost-push inflation from higher commodity prices, domestic demand pull inflation may have already been seen to-date.”

“Given the elevated consumer prices seen year-to-date, we further upgrade our headline inflation outlook to 2.0% for 2021, while keeping our core inflation outlook unchanged at 1.0%.”