Singapore’s core inflation rate rose 1.9% year-on-year in November, its smallest increase since November 2021, official data revealed on Monday. The figure fell below economists’ forecasts of 2.1% and October’s rise of 2.1%. Core inflation, which excludes private road transport and accommodation costs, provides a clearer gauge of underlying price trends.
Headline inflation followed suit, easing to 1.6% annually in November, down from the 1.8% forecast in a Reuters poll. This cooling inflation offers potential room for the Monetary Authority of Singapore (MAS) to adjust monetary policy in the coming months. However, analysts believe the MAS may delay any easing until later in 2025, influenced by broader global factors, including incoming U.S. President Donald Trump’s economic policies.
In October, the MAS kept monetary policy settings unchanged despite stronger economic growth and falling inflation. Its last policy adjustment was in October 2022, marking the fifth consecutive tightening.
Amid slowing inflation, Singapore’s trade ministry recently revised its 2024 GDP growth forecast to 3.5%, up from the earlier range of 2.0%-3.0%. This followed a better-than-expected third-quarter GDP growth of 5.4%.
According to a recent MAS survey, most economists anticipate no change in monetary policy during upcoming reviews in January, April, and July. Only a third expect the MAS to ease its stance in January by lowering the slope of the Singapore dollar’s nominal effective exchange rate, compared to half in a previous poll.
These trends highlight Singapore’s balancing act between supporting growth and managing inflationary pressures.
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