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Singapore’s inflation figures for August have surpassed economists’ expectations, prompting discussions on monetary policy. According to data released by the Department of Statistics on September 23, core inflation—excluding accommodation and private transport—rose to 2.7%, up from 2.5% in July and exceeding the median forecast of 2.6%. Meanwhile, headline inflation was recorded at 2.2%.
Food inflation remained steady at 2.7%, consistent with the previous month. This stability was attributed to rising prices of non-cooked food, which were offset by a decrease in food services inflation. The dynamics in the food sector reflect ongoing challenges and adjustments within the local economy.
Despite the uptick in inflation, private-sector economists anticipate that the Monetary Authority of Singapore (MAS) will maintain its current monetary policy stance at the upcoming meeting in October. This outlook stems from the belief that the central bank is likely to prioritize stability amid the evolving economic landscape.
Barclays economist Brian Tan highlighted that a significant rebound in travel costs contributed to the increase in core inflation. The sharp rise in these costs follows a decline observed in July, underscoring the volatility of prices within the travel sector and its impact on overall inflation metrics.
Market observers are closely monitoring these inflation trends, as they may influence consumer behavior and spending patterns in the months ahead. While rising inflation can erode purchasing power, the steady food inflation indicates some resilience within the local market.
As Singapore navigates these inflationary pressures, the MAS faces the challenge of balancing economic growth with price stability. The forthcoming monetary policy meeting will be crucial in determining how the central bank will address these competing priorities. Investors and consumers alike are keenly awaiting insights on potential policy adjustments in response to the latest inflation data.