Projection HEADLINE INFLATION LOWERED
The central bank said it anticipates overall inflation to be between 2 % and 3 % this year, compared to the previous forecast of 2.5 to 3.5 %, which is lower.
That generally reflects the lower-than-expected secret transfer inflation in recent months, MAS said in its speech.
It pointed to a decrease in core inflation as well as lower Certification of Privilege rates than they did a year ago.
” Most goods and services recorded lower prices which more than offset the , rise in water rates”, said MAS. While the service prices decreased as the rise in unit labor costs slowed, imported food expenses continued to decline.
Core prices is anticipated to decrease more significantly in the third quarter and 2025. While shipping prices have increased, world manufacturer prices have just risen quietly. Prices for world crude oil have also dropped from their most recent high in April.
Additionally, performance is anticipated to increase as the labor market is less competitive than it once was.
” Barring renewed shocks to , costs, core inflation should step down more discernibly in Q4, and fall further to around 2 % in 2025″, the statement said.
MAS noted that core inflation’s seasonally adjusted quarter-on-quarter rate increased to 2.1 % from an annualized rate in the second quarter.
” The consecutive pace of rate change, which much captures the most , current prices in the economy, is expected to be lower in the second quarter of 2024 , compared to H1″, said the central banks.
But, there are upside and downside threats to the prospect. Inflation may increase if workers costs increase due to stronger-than-expected need, or if political tensions increase.
However, if global interest rates rise for long, causing a decline in external demand, prices could drop sooner than expected.
According to MAS, the main trading partners of Singapore’s have experienced generally stable economic growth over the past few months, indicating that local economies have benefited from US resilient business investment. China’s expansion was driven by solid exports.
Geographically, growth in the second quarter was underpinned by present service and technology production. Growth in consumer-facing industries moderated after the event-driven increase previously in the year.