Singapore: Inflation drops to lowest level in over three years in September
Latest reading: Inflation fell to 2.0% in September from August’s 2.2%, marking the weakest inflation rate since March 2021. Looking at the details of the release, the moderation was broad-based, with lower price pressures recorded for food plus housing and utilities. Moreover, transport costs dropped for the first time in nearly four years.
As a result, annual average inflation fell to 3.0% in September (August: 3.2%). Meanwhile, core inflation ticked up to 2.8% in September from August’s 2.7%.
Finally, consumer prices increased 0.25% from the previous month in September, below August’s 0.69% increase.
Outlook: Our panelists forecast inflation to remain around current levels through end-2024. Over 2025 as a whole, inflation will ease from 2024’s projected level, staying below the ASEAN average on the back of declining commodity prices and a strong Singapore dollar curbing imported price pressures. Commodity price spikes are an upside risk.
Panelist insight: Commenting on the reading, Jester Koh, economist at United Overseas Bank, stated:
“Despite the stronger-than-expected core inflation outturn, the disinflation progress remains intact as evidenced by the slowing of its sequential momentum, although the recent uptick in food inflation momentum warrants close monitoring. […] We maintain our 2024 average core inflation forecast at 2.8% ([Monetary Authority of Singapore’s (MAS) forecast range of 2.5-3.0%]) and project core inflation to ease significantly to 1.7% in 2025 (MAS: 1.5-2.5%) on higher base effects.”