Singapore’s Inflation has Decreased
Singapore’s core inflation fell again in August 2023 compared to the previous year following the recovery of the supply chain and a decrease in the import burden.
The Singapore Department of Statistics reported that core inflation excluding housing and transportation costs touched 3.4 percent in August 2023 compared to the same month the previous year (year-on-year/yoy).
This core inflation figure is lower than the median estimate in a Bloomberg survey of analysts who estimated inflation at 3.5 percent. Meanwhile, the main inflation figure reached 4 percent yoy and fell from the level of 4.1 percent in July 2023.
This lower inflation data allows the Singapore central bank or Monetary Authority of Singapore (MAS) to continue its monetary tightening pause. This data is the last inflation data before the next MAS policy review in October, as well as confirming the deflationary trend in Singapore.
This prompted the central bank to remain at its second meeting in a row, even though globally the outlook for interest rates differs for each country based on domestic developments.
In the US, the Federal Reserve is expected to raise its benchmark interest rate in November 2023 after inflation in August rose beyond expectations. Low inflation in the UK has forced the Bank of England to maintain its monetary policy.
Singapore’s Inflation has Decreased. The MAS, which regulates currency rates to adjust monetary conditions, expects inflation to continue to decline in the coming months as imported inflation remains low compared with last year’s levels and the tightness of the domestic labor market is now easing.