Singapore Inflation December 2018


Singapore: Inflation inches up in December, exceeding market expectations

January 23, 2019

Consumer prices increased 0.1% over the previous month in December, edging down from the 0.2% uptick recorded in November. According to data released by Statistics Singapore, the rise was primarily caused by higher prices for food, health care and recreation and culture.

Inflation was 0.5% in December, up from November’s 0.3%, and marginally higher than the 0.4% market analysts expected. Moreover, annual average inflation was stable at 0.4% in December.

Meanwhile, the Monetary Authority of Singapore’s (MAS) core inflation measure, which omits the costs of accommodation and private road transport, edged higher to 1.9% in December, as a result of larger increases in the costs of services and retail items. This was up from November’s 1.7% and surpassed market expectations of 1.7%.

In 2019, MAS expects CPI inflation to average between 1.0% and 2.0%, and core inflation to average between 1.5% and 2.5%. FocusEconomics Consensus Forecast panelists expect inflation to average 1.2% in 2019, which is down 0.1 percentage points from last month’s forecast. In 2020, panelists also expect average inflation of 1.4%. That said, there is a significant divergence in panelists’ views. For instance, analysts at Nomura state: “For 2019, we maintain our out-of-consensus headline inflation forecast of 0.3% […], which is well below the MAS forecast range of 1.0-2.0%, as we expect deflation in non-core items to persist. We maintain our core inflation forecast of 1.5% in 2019, but see an undershoot of the MAS forecast range of 1.5-2.5% as possible, which reflects our cautious view on growth and domestic structural headwinds.”

Author:, Economist

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Singapore Inflation Chart

Singapore Inflation December 2018

Note: Annual and monthly variation of consumer price index in %.
Source: Statistics Singapore (Singstat).

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