Core inflation expected to cool to 3-year low by end-2024: MAS

A measure of inflation that represents key Singapore household expenses is forecast to decline to around 2 per cent by the end of the year - the lowest level since November 2021 - and ease further into 2025, said the Monetary Authority of Singapore (MAS).

- Ovais Subhani

The central bank's estimate is for core inflation which excludes private accommodation and transport costs to better represent Singapore household expenses - and comes after two months of higher-than-expected outcomes.

After falling to 2.5 per cent in July - the lowest level in more than two years - core inflation came in at 2.7 per cent in August and 2.8 per cent in September as retail and services inflation picked up pace.

However, MAS said in its Macroeconomic Review report on Oct 28 that core inflation has come off significantly from the 5.5 per cent peak in January 2023 and, despite the volatility in monthly data, the declining trend should remain generally intact.

For the year as a whole, the central bank projected that core inflation will average 2.5 per cent to 3 per cent in 2024, down from 4.2 per cent in 2023. Meanwhile, all-items inflation is expected to come in around 2.5 per cent on average in 2024, compared with 4.8 per cent the year before.