Singapore: core inflation steady, risks to the downside - ANZ

According to Khoon Goh - Head of Asia Research at Australia and New Zealand Banking Group Limited (ANZ), the larger-than-expected increase in Singapore’s CPI-All Items inflation to 0.9% y/y in May do not signal a rise in inflationary pressure.

Key Quotes:

“Instead the cause, at least relative to our expectations, was a larger unwinding of the previous month’s S&CC rebate, and a large increase in private transport costs during the month. The MAS Core Inflation was unchanged from the previous month at 1.3%. There are signs that inflationary pressure from the labour market is starting to ease. Along with lower oil prices compared to a year ago, the MAS Core Inflation is set to fall towards 1% y/y in the coming months. If there are further signs that the downside risks to Singapore’s export and growth outlook are worsening, then Singapore’s monetary policy could tilt towards an easing later in the year.”