Singapore Inflation Rises To 4.7% In September, Exceeds Forecast

Singapore Inflation 231012

Singapore's consumer price inflation accelerated in September, driven mainly by a marked gain in housing costs and transportation expenses, making it difficult for authorities to engage in policy adjustments to tackle the city state's slowing growth.

A statement from the Ministry of Trade and Industry and the Monetary Authority of Singapore, or MAS, Tuesday said that inflation increased sharply to 4.7 percent in September from August's 3.9 percent, which represented a 21-month low. Economists were looking for a more modest rise to 4.3 percent. In July, inflation was at 4 percent.

Contributing significantly to the overall growth in consumer prices, transportation expenses and housing costs increased by 9.6 percent and 6.4 percent, respectively from last year. Food prices were higher by 2.1 percent compared to last year and clothing and footwear prices rose by 2.4 percent.

On a monthly basis, the consumer price index moved up 0.6 percent in September. In the January-September period, prices advanced 4.8 percent from the same period a year earlier.

The MAS kept the monetary policy unchanged at its latest rate-setting session to contain inflationary pressures and to keep the economy on a path of sustainable growth. The MAS expects Singapore's CPI-All Items inflation to come in slightly above 4.5 percent in 2012 before easing gradually to 3.5-4.5 percent in 2013.

After growing by an estimated 1.5-2.5 percent in 2012, the economy is expected to see a slightly below potential-growth in 2013.

Advance estimates released by the the Ministry of Trade and Industry earlier this month showed that gross domestic product declined a seasonally adjusted 1.5 percent in the third quarter compared to the previous three months. But Singapore managed to escape a technical recession because the second quarter figure was revised up to 0.2 percent from -0.7 percent.

The island nation's economy has been hit hard by unusually high inflation in recent years, owing primarily to high housing rents and car prices. Strict labor market policies that make it difficult for firms to hire workers from abroad has also added to inflation pressures.

For comments and feedback contact: editorial@rttnews.com

Economic News

What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.

Follow RTT