December 21, 2018 / 4:39 AM / 6 months ago

Singapore's November inflation seen slowing to 0.6 percent year-on-year: Reuters poll

SINGAPORE (Reuters) - Singapore’s consumer price index probably rose 0.6 percent in November from a year earlier, a Reuters poll showed, slowing slightly from 0.7 percent in the month before.

FILE PHOTO: A woman shops for shoes in Singapore April 24, 2017. REUTERS/Edgar Su

The poll also showed that the Monetary Authority of Singapore’s (MAS) core inflation measure likely increased 1.9 percent from a year earlier in November, unchanged from the previous month.

Irvin Seah, a senior economist with Singapore’s biggest lender DBS, said the expected CPI dip was partly technical - due to a high reading last November - and could also be impacted by slipping oil prices and a supply glut in the domestic car market.

“The CPI inflation numbers have been pretty sluggish in the last few months,” Seah, who is predicting a 0.6 percent y/y reading for November, said.

Oil prices have this week hit their lowest in more than a year on worries about oversupply and the outlook for energy demand. [O/R]

The central bank’s core inflation measure - which excludes changes in the price of cars and accommodation - is seen as a gauge more closely watched by policymakers who have tightened policy in both of their semi-annual meetings this year.

At its meeting in October, MAS said the city-state’s economy is likely to expand steadily barring a setback to global growth from trade frictions between the United States and China.

“Core inflation remains fairly steady...so nothing that would cause the MAS to back down from their current policy,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.

“Given that their starting point was a very gradual approach to tightening, I don’t think they are going to be knocked off their seats by whatever goes on in the oil market.”

The MAS’ next scheduled policy meeting is in April 2019.

Reporting by John Geddie; Editing by Subhranshu Sahu

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