October 23, 2018 / 5:22 AM / in a month

Singapore core inflation edges down in September, surprising economists

SINGAPORE (Reuters) - Singapore’s core inflation gauge in September missed forecasts and edged down slightly to 1.8 percent from a year earlier due to lower retail inflation, data showed on Tuesday.

FILE PHOTO: People shop for vegetables at a wet market in Singapore March 22, 2017. REUTERS/Edgar Su/File Photo

September’s data comes weeks after Singapore’s central bank tightened monetary policy for the second time this year and announced that inflation is projected to rise in the near term.

The median forecast in a Reuters poll was for core inflation to be 1.9 percent, unchanged from the 4-year highs seen in August and July.

“I’m quite surprised that inflation eased from the four-year high in the last two months,” Alvin Liew, an economist at UOB, told Reuters.

“If you followed the MAS policy, you’d expect it to edge higher,” he added.

The central bank’s core inflation measure excludes changes in the price of cars and accommodation, which are influenced more by government policies.

Singapore’s headline consumer price index rose less than expected at 0.7 percent in September from a year earlier, unchanged from August. This was also lower than the median forecast in a Reuters poll which called for all-items CPI to rise 0.8 percent.

Despite the slower-than-expected inflation gauge, economists like Liew say it is too early to tell if MAS will stop their tightening trajectory next year.

“We have to look at it on a trend basis,” Mizuho Bank economist Vishnu Varathan said.

“I think it’s premature to call it on these numbers,” he added.

Reporting by Fathin Ungku; Editing by Sunil Nair

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