Illustrative image (Source: Getty Images)Singapore’s inflation is forecast to rise slightly this year due to the impacts of global petrol and food prices, according to the Monetary Authority of Singapore (MAS) and the Ministry for Trade and Industry (MTI).
Global oil prices have rallied since the start of 2018 and are expected to average higher for the full year as compared to 2017. Meanwhile, global food commodity prices are projected to rise slightly as demand increases amid ample supply conditions, said the MAS and the MTI.
Domestic sources of inflation are expected to increase alongside a faster pace of wage growth and a pickup in domestic demand.
However, the extent of consumer price increases will remain moderate, as retail rents have stayed relatively subdued and firms’ pricing power may be constrained by market competition.
The MAS - the central bank of Singapore - forecast that core inflation, which strips out the cost of accommodation and private road transport, will stay at 1.5 percent this year while headline inflation be above 0.5 percent.
Singapore’s headline inflation held steady in August with prices up 0.7 percent year-on-year, mostly due to increase in food and retail prices.
This was in line with economist expectations and just a tick faster than the 0.6 percent in July.
The overall cost of retail items went up by 2 percent in August, up from 1.6 percent rise in July. This was due to a faster pickup in the prices of clothing and footwear, as well as an increase in the prices of personal care products.
Food inflation edged up to 1.7 percent in August on the back of a faster pace of increase in the prices of non-cooked food items and prepared meals.
Core inflation rose by 1.9 percent in August– unchanged from July. These two consecutive months marked the fastest rate of increase since August 2014, when it climbed 2 percent./.