By Xinghui Kok
SINGAPORE (Reuters) – Singapore’s key consumer price gauge rose 3.3% in December on a yearly basis, official data showed on Tuesday.
The core inflation rate – which excludes private road transport and accommodation costs – was above the 3.1% forecast by a Reuters poll of economists and the 3.2% seen in November.
Maybank economist Chua Hak Bin said the disinflation process had “come to a halt in December, even before the hike in sales tax and carbon taxes in January this year”.
“The stronger Singapore dollar has helped to curb imported inflation, but domestic cost pressures continue to brew,” he said, citing schemes to adjust wages upwards and changes to the pension fund that will keep inflation pressures elevated.
Headline inflation in December was at 3.7% compared with the same month last year, higher than economists’ forecast of 3.5%.
The central bank will next review its monetary policy on Jan. 29.
The Monetary Authority of Singapore will likely keep settings unchanged to contain inflation pressures, Chua said.
It left monetary policy unchanged in April and October last year, after tightening at five consecutive reviews prior to that.
Singapore’s economy saw some upside in the second half of 2023, surprising economists in the fourth quarter with 2.8% year-on-year growth driven by manufacturing and construction.
Its gross domestic product (GDP) for the full year of 2023 was 1.2% and the trade ministry projects GDP will grow by 1-3% in 2024.
(Reporting by Xinghui Kok; Editing by Kanupriya Kapoor)
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