Singapore CPI Inflation Hits Over 2-Year Low in January
Singapore CPI Inflation at Slowest Pace in 2 Years
Consumer price index inflation in Singapore grew at its slowest pace in over two years in January. This was due to decreasing fuel and housing costs, as well as a decline in recreational spending caused by tight monetary conditions.
Headline Inflation Figures
The headline inflation grew 2.9% year-on-year in January, according to official data released on Friday. This figure was lower than expectations of 3.8% and eased from the 3.7% seen in December. It also marked the slowest pace of CPI inflation since September 2021. Month-on-month CPI inflation picked up 0.7%.
Core Inflation and Monetary Policy
Core inflation, which excludes volatile items such as accommodation and private transport expenses, rose 3.1% year-on-year, less than expectations for a reading of 3.6% and slowing from the 3.3% seen in December. This reading is closely watched by the Monetary Authority of Singapore in altering monetary policy.
Impact of Inflationary Pressures
Friday’s reading indicates that inflationary pressures may be easing faster than expected in the island state, especially thanks to stabler commodity costs and declining consumer spending. However, food price inflation remained steady, as did spending on other miscellaneous goods.
Monetary Policy and Economic Growth
While inflation eased in January, it still remained relatively higher than levels seen before the COVID-19 pandemic, indicating that the MAS was likely to keep monetary conditions restrictive in the near-term. The Singapore economy was also seen growing at a slower than initially expected pace in the fourth quarter.