(Bloomberg) -- Singapore’s core inflation remained elevated in September, driven by healthcare and education, suggesting that price pressures are still sticky and underscoring the need for monetary policy to remain tight for now.
The core measure, which excludes housing and private transportation costs, rose 2.8% last month from a year earlier, government data showed Wednesday. That’s higher than the median estimate of 2.7% in a Bloomberg News survey.
The gauge has held above 2% since December 2021, worrying policymakers who see a core inflation rate of just under 2% on average as “consistent with overall price stability in the economy.” The Monetary Authority of Singapore doesn’t have an explicit inflation target.
Headline inflation came in at 2% in September, the slowest pace in 3-1/2 years, the data showed. That was quicker than the 1.9% median estimate in a Bloomberg News survey. The non-seasonally adjusted monthly measure came in at 0.3%, also exceeding estimates.
The MAS’s latest forecasts show both headline and core inflation easing to 1.5%-2.5% in 2025. The central bank now sees price risks as more balanced than before, it said last week after leaving monetary settings on hold for a sixth consecutive review.
What Bloomberg Economics Says...
We expect headline inflation to remain near 2% over the next 12 months — barring a spike in commodity prices from tensions in the Middle East or adverse weather disrupting food supply. This should give the central bank greater scope to loosen monetary policy settings next year.
—Tamara Henderson, Asean economist
For the full note, click here
(Updates with comment from Bloomberg Economics. An earlier version corrects transport prices in third bullet under highlights.)
©2024 Bloomberg L.P.