Senior Economist at UOB Group Alvin Liew reviews the latest inflation figures in Singapore.

Key Takeaways

“Singapore’s headline CPI rose slightly faster than expected, at 1.0% m/m, 5.6% y/y in May (from 0.1% m/m, 5.4% y/y in Apr). Core inflation (which excludes accommodation and private road transport) also rose at a faster clip, up by 3.6% y/y in May (from 3.3% y/y in Apr).”

“The sources of price pressures for core inflation in May were broad-based, ranging from food, to services, to retail & other goods, including clothing & footwear, personal effects and personal care products, to electricity & gas. As for the headline CPI inflation, other than upside to the core CPI, both the accommodation costs and private transport costs were the key drivers of overall price increases.”

“External inflation pressures continue to be driven by the on-going Russia-Ukraine conflict which in turn, impacts commodity prices, especially energy and food. Supply-demand mismatches, as well as disruptions to global transportation and regional supply chains, add further upside to prices. Domestically, the tight labour market situation resulting in upside wage pressures also bears watching as it feeds into higher services cost.”

“We now expect headline inflation to average 5.0% (up from previous forecast of 4.5%) and core inflation at 4.0% (up from previous forecast of 3.5%) in 2022. This is in line with the official outlook for headline CPI (4.5 – 5.5%) but exceeds the official core inflation forecast range (2.5% - 3.5%), and the risks are tilted to the upside. Even as Singapore’s central bank, MAS, kept its core inflation forecast range unchanged, it highlighted in the report that improving demand and a greater passthrough of accumulating business costs to consumer prices will keep ‘core inflation significantly above its historical average through the year.’”

“We expect MAS to further steepen the S$NEER gradient at the Oct 2022 monetary policy meeting to 2% (from the currently estimated 1.5%), while leaving the width of the band and the level at which it is centred unchanged. But the risk of another double-tightening or a steeper slope or perhaps, most importantly, another off-cycle tightening (ahead of Oct) cannot be ruled out especially if core inflation accelerates well above 4% in the next few months.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures