According to official statistics released on Monday, Singapore’s main consumer price indicator increased 2.1% in October compared to the same month last year, less than experts had predicted and the smallest increase in over three years.
The core inflation rate, which does not include the cost of private transportation or lodging, was 2.8% in September, compared to 2.5%, as predicted by a Reuters poll of economists.
October’s core inflation rate of 2.1% was the lowest since December 2021. Authorities attributed the decline to a slowdown in the inflation of retail and other goods, services, gas, and energy.
Chua Hak Bin, an economist at Maybank, stated that the central bank has the flexibility to ease monetary policy at its next meeting in January because the core inflation figure is approaching its forecast of 2% by year-end.
Chua anticipates that the central bank will use the Singapore dollar nominal effective exchange rate (S$NEER), which it uses to control monetary policy, to reduce the rate of appreciation. At a review last month, the MAS maintained its policy settings as economic prospects improved and inflation pressures continued to moderate.
The central bank and commerce ministry stated on Monday that core inflation will likely stay at about 2% through the end of the year and then decline to 1.5% to 2.5% in 2025.
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