SINGAPORE, Sept 25 — Singapore’s inflation slowed in August, matching the weakest pace this year, and testing the Monetary Authority of Singapore ahead of its semi-annual policy decision in October.
Highlights
CPI rose 0.4per cent from year earlier (est. 0.6per cent); Singapore Department of Statistics previously reported CPI rose 0.6per cent year-on-year in July Prices climbed 0.3per cent from prior month Core inflation increased 1.4per cent from August 2016 (est. 1.6per cent); this is a measure monitored by the MAS, which excludes private road transport and accommodation
Key takeaways
The MAS, which uses the exchange rate as its main tool, has kept its policy stance unchanged since April 2016. The central bankers said at their April meeting this year that they would stick to a neutral stance for an “extended period” of time. Economists are watching closely for any tweaks to the language while also monitoring data that might give the central bankers reason to consider tightening measures.
While the Singaporean economy has been recovering, the strength primarily has been due to a pickup in exports. Consumer spending and the labour market remain weak.
“Overall, domestic sources of inflation remain relatively muted,” the MAS and Ministry of Trade and Industry said in a joint statement after the data, repeating language they issued in August. “Conditions remain slack in the labour market and this is expected to dampen underlying wage pressures, even as commercial and retail rents have continued to ease.”
Other details
Housing and utilities, which make up a quarter of consumer price basket as the heaviest-weighted category, fell 2.3per cent in year ended in August Education and health care showed the fastest rates of inflation, at 2.7per cent and 2.5per cent, respectively MAS and MTI are looking for core inflation to average 1per cent to 2per cent for all of 2017, compared with 0.9per cent last year. — Bloomberg
