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24 Dec 2013
Flash: Singaporean CPI inflation still strong - Nomura
FXstreet.com (Bali) - CPI inflation in Singapore accelerated slightly above expectations, notes Nomura.
Key Quotes
CPI accelerated to 2.6% y-o-y in November (Consensus: 2.5%, Nomura: 2.0%) from 2.0% y-o-y in October. Higher accommodation costs and transportation prices were the key factors behind the higher-than-expected gain in consumer prices.
"CPI inflation data adds upside risk to our 2013 inflation forecast of 2.3% against an official forecast of 2.5-3.0%. For 2014, however, we expect inflation to continue to climb, averaging 3.6% versus the official forecast of 2-3%."
"This is basically a reflection of the tighter labour market that will continue to underpin strong services demand and thus higher services inflation."
"This was also highlighted by the MAS and the ministry of trade and industry in today‟s statement: “…the pass-through of domestic costs to prices of consumer services could intensify as a result of the rising cost pressures that firms are facing from business rentals and labour costs.”
"Given the upward pressure on the inflation rate, we expect the MAS to maintain its monetary policy stance to keep the extent of imported inflation relatively low and manageable."
Key Quotes
CPI accelerated to 2.6% y-o-y in November (Consensus: 2.5%, Nomura: 2.0%) from 2.0% y-o-y in October. Higher accommodation costs and transportation prices were the key factors behind the higher-than-expected gain in consumer prices.
"CPI inflation data adds upside risk to our 2013 inflation forecast of 2.3% against an official forecast of 2.5-3.0%. For 2014, however, we expect inflation to continue to climb, averaging 3.6% versus the official forecast of 2-3%."
"This is basically a reflection of the tighter labour market that will continue to underpin strong services demand and thus higher services inflation."
"This was also highlighted by the MAS and the ministry of trade and industry in today‟s statement: “…the pass-through of domestic costs to prices of consumer services could intensify as a result of the rising cost pressures that firms are facing from business rentals and labour costs.”
"Given the upward pressure on the inflation rate, we expect the MAS to maintain its monetary policy stance to keep the extent of imported inflation relatively low and manageable."