Singapore: High inflation still seen as transitory – UOB
Economist at UOB Group Barnabas Gan assesses the recently published inflation figures in Singapore.
Key Takeaways
“Singapore’s consumer prices rose 2.5% y/y (-0.2% m/m nsa) in July 2021, in line with market estimates This is the seventh straight month where Singapore’s saw higher consumer prices from a year ago, while the latest print was slightly faster than June’s inflation pace of 2.4% y/y (0.0% m/m sa). Accounting for the latest data, Singapore’s consumer prices rose 1.7% in the first seven months of 2021.”
“Singapore’s core inflation also accelerated to 1.0% y/y in July 2021 (from June’s 0.6% y/y), the fastest pace since June 2019.”
“Official estimates for headline inflation is maintained at a range of between 1.0% and 2.0% for 2021, a forecast that was upgraded from an outlook of between 0.5% and 1.5% in the previous CPI report. Official core inflation expectation is also kept unchanged at a range of between 0.0% and 1.0%.”
“We keep to our view that inflationary pressures should stay transitory for the year ahead.”
“We keep to our headline and core inflation outlook of 1.4% and 1.0% for 2021, respectively. However, we recognise some upside risk to our full-year headline inflation given Singapore’s overall positive domestic economic prognosis and elevated external inflation pressures.”
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
