The January figure is up from 5.1% in December but a tad lower than the 5.6% expected by analysts in a Bloomberg poll. — Bloomberg
SINGAPORE: Consumer prices in Singapore rose at a faster pace in the first month of 2023, pushed up by Chinese New Year spending and the higher goods and services tax (GST) that has just kicked in.
Core inflation, which excludes the costs of private transport and accommodation and reflects the expenses of Singapore households more accurately, rose to 5.5% year-on-year in January, the highest since November 2008.
The January figure is up from 5.1% in December but a tad lower than the 5.6% expected by analysts in a Bloomberg poll.
January marked a return to rising core inflation, which plateaued from October to December after going up for eight straight months.
Festive demand, on top of a higher GST, may have added to price pressures, said CIMB economist Song Seng Wun. He noted that food inflation globally had eased, so “what we are seeing now is the lag in the passing down of rising costs to consumers”.
The headline consumer price index (CPI), or overall inflation, edged up to 6.6% in January from December’s 6.5% – but was lower than analysts’ forecast of 7.1%.
The higher headline CPI comes on the back of higher accommodation inflation, said the Monetary Authority of Singapore and the Trade and Industry Ministry.
OCBC chief economist Selena Ling believes core inflation may ease to 5% from the second quarter, but for now, she said it was about waiting and seeing what happens from February onwards.
“Headline CPI is softer than expected but core CPI is still on the ascent and that’s what policymakers will focus on,” she said.
Song noted that the higher base last year meant that inflation was likely to moderate in the second half of the year, but the question is how much. “In a full employment situation, as long as consumers can afford to pay for goods and services, this will add to inflation,” he said.
Finance Minister Lawrence Wong said he expected headline inflation to remain high for the first half of 2023. — The Straits Times/ANN
