OUTLOOK
“Although global energy prices have been volatile in recent weeks, they have on average remained below the levels a year ago,” said MAS and MTI.
“Meanwhile, in tandem with easing global inflation and the gradually strengthening trade-weighted S$ exchange rate, Singapore’s imported manufactured goods prices have also continued to be on a broad decline.”
Domestically, unit labour costs are projected to rise more gradually, alongside moderating nominal wage growth and improving productivity.
Services inflation, which has been on an easing trend, should slow further over the rest of 2024, said the authorities.
Core inflation is expected to remain at around 2 per cent through to end-2024, said MAS and MTI.
It is projected to average 2.5 to 3 per cent in 2024 as a whole, and step down further to 1.5 to 2.5 per cent in 2025.
Accommodation inflation is forecast to come in lower next year, which should partly offset an anticipated pick up in private transport inflation amid “firm demand” for cars.
Overall inflation is expected to come in at around 2.5 per cent for the whole of 2024, and average from 1.5 per cent to 2.5 per cent next year.
“Risks to the inflation outlook are relatively balanced. Domestically, stronger-than-expected labour market conditions could lead to a slower easing in unit labour cost growth,” said MAS and MTI.
“An intensification of geopolitical tensions may lead to higher commodity prices and add to imported costs. Conversely, a significant downturn in the global economy could induce a greater easing of cost and price pressures, causing domestic inflation to come in lower than expected.”
