In Singapore, core inflation showed a dynamic of the decline in November.
The mentioned result allowed the central bank of the city-state to extend the pause in monetary policy. This opportunity is essential in terms of supporting Singapore’s economic system.
Core inflation in the city-state was recorded at 3.2% last month. This indicator indicates an acceleration in the growth of the cost of goods and services. At the same time, the November result is better than the core inflation rate recorded in October. In the second month of autumn, this figure was 3.3%.
Experts say that the current dynamic of inflation in Singapore is evidence of weakening local consumer demand.
The growth rate of the cost of goods and services in the city-state in November coincided with the preliminary expectations of economists. who were interviewed by the media.
In a joint statement, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry noted that inflationary pressures on retail and other goods, food, electricity, and gas decreased last month.
The central bank of the city-state will make another decision on monetary policy at the end of January.
MAS, which uses the exchange rate as its main instrument, has not changed its strategy following two scheduled reviews this year after tightening settings five times between October 2021 and 2022.
Maintaining the nominal effective exchange rate of the Singapore dollar at an increasing level has helped offset import inflation, but the central bank still needs to balance the goal of price stability with a vision of economic development expressed in the most desirable indicators.
The city-state is currently recording a growth in exports, an increase in manufacturing output, and an improvement in the dynamic of business activity in the sphere of electronics. At the same time, these favorable circumstances do not mean that Singapore finds itself in a territory where there are no risks and there is no likelihood of negative scenarios. In this case, the mentioned growth indicators may be canceled or lose their practical significance to a large extent against the background of China’s struggle to stabilize economic growth, which may have a ripple effect that does not favor other countries, and due to supply chain disruptions because of the tense geopolitical situation. For example, the current difficulty of navigation in the Red Sea is a factor of global influence.
The Singapore government expects the country’s economy to grow by 1% in 2023. At the same time, the forecast for next year is more optimistic. The Singapore government expects economic growth to be recorded in the range of 1% to 3% in 2024.
MAS has decided to review the policy parameters quarterly, starting next month. The regulator explained this decision by changing economic challenges.
In November, food inflation in Singapore decreased to 4%. In October, this figure was 4.1%. Retail and other goods inflation fell to 1% in November from 1.6% a month earlier.
MAS continues to hold the view that for 2023, the average core inflation in Singapore will be about 4%. For the next year, this indicator is projected to exist in the range from 2.5% to 3.5%.
Industrial production in Singapore increased by 1% year-on-year last month. In October, the growth of this indicator was 7.6% compared to the same period in 2022.
As we have reported earlier, Singapore to Suspend Non-Bank and Non-Card Channels for Remittance to China.
