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Singapore Inflation January 2024

Singapore: Inflation falls to over two-year low in January

Inflation fell to 2.9% in January, down from December’s 3.7%. January’s reading marked the weakest inflation rate since September 2021 and inched down closer to the Monetary Authority of Singapore’s preferred rate of 2.0%. The result was driven by moderating price pressures for food and transport. The result surprised markets on the downside as a stronger pass-through effect of the last round of goods and services tax hikes had been expected.

Accordingly, the trend pointed down, with annual average inflation coming in at 4.5% in January (December: 4.8%). Meanwhile, core inflation edged down to 3.1% in January, from the previous month’s 3.3%.

Lastly, consumer prices dropped 0.67% in January over the previous month, contrasting December’s 0.38% increase. January’s result marked the weakest reading since April 2020.

ING analyst Nicholas Mapa commented on the outlook:

“Despite the downside surprise for January inflation, we believe the Monetary Authority of Singapore (MAS) will likely maintain its stance in the near term. Any adjustments to policy will likely still happen in the latter half of the year once inflation shows signs of convincingly heading back to and remaining close to the MAS inflation target.”

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