Singapore: Inflation ticks down in January, undershooting market expectations
February 25, 2019
Consumer prices fell 0.3% over the previous month in January, contrasting the 0.1% increase recorded in December. According to data released by Statistics Singapore, the fall was primarily caused by lower prices for housing and utilities; and recreation and culture.
Inflation was 0.4% in January, down from December’s 0.5% and missing market analysts’ expectations of 0.6%. Meanwhile, annual average inflation inched higher to 0.5% in January from 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 lower to 1.7% in January, as a result of a softer price increase in the cost of electricity and gas. This was down from December’s 1.9% print and shy of the 1.9% market analysts projected.
Surprised by the result was Sanjay Mathur, chief economist of South East Asia and India, at ANZ Research, who noted:
“Both outturns were below our and market estimates. Nonetheless, the deviation from our forecasts was largely confined to the ‘recreation and culture’ component. […] As the January data does not show evidence of a broad-based easing of price pressures, we maintain that the MAS could tighten monetary policy again at the April policy review.”
Author: Steven Burke, Economist