Inflation in Singapore records smallest increase since February 2022

What's going on here?

Singapore's core inflation The rate for July rose 2.5% year-on-year, the smallest increase since February 2022.

What does this mean?

The core inflation rate of 2.5% in July – lower than the 2.9% expected in a Reuters poll – suggests that inflationary pressures in Singapore are easing. This follows the rate of 2.9% in June, which was a significant trend. Inflation was last this low in February 2022. Headline inflation was 2.4%, just below the forecast 2.5% and at its lowest level since August 2021. After peaking at 5.5% in early 2023, inflation has steadily declined, falling below 3% in June. As a result, MAS expects more significant easing in the last quarter of 2023 and has revised its core inflation forecast for this year to a range of 2.5% to 3.5%.

Why should I care?

For markets: Release the pressure and navigate confidently.

The lower than expected inflation figures should reassure investors of a stable economic environment. Easing inflation can reduce the risk of aggressive monetary policy measures by the MAS and make the Singapore market more attractive to investors. If this trend continues, sectors sensitive to interest There could be positive effects on interest rates, for example in the real estate and banking sectors.

The overall picture: Global economic changes are on the horizon.

Singapore's revision of its 2024 GDP growth forecast due to stronger-than-expected economic performance in the second quarter points to a robust economy. The new forecast range of 2.0% to 3.0% underscores increased confidence in the economy's trajectory. This, coupled with easing inflation, suggests that Singapore could offer a stable investment climate in an increasingly volatile global market.