Inflation picked up to 3.7% in December 2023

SINGAPORE: The Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) have released data indicating an uptick in inflation, reaching 3.7% in December 2023. This follows a 3.6% inflation rate recorded a month prior.

The key contributors to the expansion in the consumer price index (CPI)-all items inflation were the accelerated rise in private transport costs, climbing from 4.2% to 5.0%, and a noticeable pickup in services inflation, reaching 3.9% compared to the previous 3.5%.

On the other hand, certain expenditure divisions experienced a decline in the rate of price increase, notably electricity and gas (1.3% YoY from 1.5% YoY) and food (3.7% YoY from 4.0% YoY).

Core inflation for December stood at 3.3% YoY, a slight uptick from November’s 3.2% YoY. This aligns with the broader trend observed in 2023, where headline inflation averaged 4.8%, showing a decrease from the 6.1% recorded in 2022. In contrast, core inflation for the year averaged 4.2%, up from 4.1% in the preceding year.

Looking ahead, MTI anticipates core inflation for 2023 to range between 2.5% and 3.5%. The ministry said that “excluding the transitory effects of the 1%-point increase in the GST rate to 9%, core inflation is expected to come in at 1.5–2.5%.”

Further insights into the inflation landscape and a forecast range for headline inflation are expected to be released in MAS’ January Monetary Policy Statement. This will provide a more comprehensive view of the economic trajectory and potential policy implications in response to evolving inflationary pressures.