Singapore’s inflation eased more than expected in October amid fewer supply chain problems and cooling commodity prices, but it still expects economic growth to slow in 2023 amid mounting global headwinds.
According to official data on Wednesday (23rd), Singapore’s core CPI increased by 5.1% in October, lower than the expected 5.3% and 5.3% in September, and it was also the first growth rate drop in eight months.
Including items such as private transportation and lodging costs, the headline CPI rose 6.7% in October, well below expectations for a 7.1% increase and the previous month’s 7.5%.
The slowdown in inflation growth suggests that the monetary tightening measures adopted by the HKMA this year are paying off. Easing supply chain issues and a stable commodity market are also helping to reduce price pressures in Singapore.
Nonetheless, inflation remains relatively high, and MAS forecasts that high labor costs and persistent supply shortages will keep inflation high in the near term.
The Monetary Authority of Hong Kong maintains its 2022 core CPI forecast of 3.5%-4.5%, and the overall CPI forecast of 5.5%-6.5%.
But Singapore’s economic outlook appears to have deteriorated further. Singapore’s GDP is expected to grow by 0.5%-2.5% in 2023, well below the 3.5% growth forecast for 2022, the Ministry of Trade and Industry (MTI) said in a separate announcement. The trade and industry ministry also said gross domestic product rose 4.1 percent in the third quarter, below the government’s forecast.
Singapore’s non-oil exports, the main driver of growth, have slumped this year on weak demand, especially from top trading partner China. The economy is also under pressure from tightening monetary conditions, with the HKMA tightening policy for the fifth time in 12 months in October.
The Singapore dollar edged up losses after the economic data, slipping 0.3% against the greenback.