Singapore’s Consumer Prices Rise 4.0% on Year in January
SINGAPORE–Singapore’s consumer prices rose at the same on-year pace in January as in December, as a moderation in private transport costs increase offset higher core and accommodation inflation.
The consumer price index for January rose 4.0% compared with the same period a year before, the Department of Statistics said Wednesday. That was slightly below the median estimate for a 4.1% rise from a Wall Street Journal survey of nine economists. The city-state’s CPI rose 4.0% on year in December.
The cost of transportation, which has an index weighting of 17.07%, climbed 12.7% on year in January, slowing from December’s 13.7% increase. Food prices, which have a 21.10% weighting, rose 2.6%, while housing and utilities costs, which make up 24.84% of the index, rose 4.1%, the data showed.
Core CPI, which strips out private road transport and accommodation costs, rose 2.4% in January from a year earlier, following the 2.1% increase in December. The median estimate in the WSJ survey was for a 2.5% rise in January.
Global inflation has risen further recently and could stay high for some time before easing in the latter half of the year, the Monetary Authority of Singapore and the Ministry of Trade and Industry said in a joint statement on Wednesday.
In the near term, heightened geopolitical risks and tight supply conditions will keep crude oil prices elevated, while bottlenecks in global transportation and labor shortages in a number of Singapore’s major trading partners are likely to persist, they said.
Although ongoing external supply constraints should ease in the second half of 2022, leading to some moderation in imported inflation, there remain upside risks to inflation from pandemic-related and geopolitical shocks that could further disrupt global supply chains, the MAS and MTI said.
Singapore’s labor market should continue to tighten and lead to strengthened wage pressures over the course of the year, they said. Cost increases are likely to filter through to higher services prices as private consumption picks up. For the non-core CPI components, car and accommodation cost increases are likely to remain robust in the near term, keeping headline inflation elevated.
Overall, Singapore’s core inflation is forecast to pick up further in the near term, and could reach 3% by the middle of 2022 before easing in the second half of the year as external inflation recedes, the MAS and MTI said. For 2022, core inflation is projected to average 2%-3% while headline inflation is forecast to come in within 2.5%-3.5%, they added.