(Oct 23): Singapore’s core inflation rate unexpectedly slowed in September as the import-reliant economy largely withstood the resurgence of global oil prices, reinforcing the central bank’s decision last week to hold policy steady. 

Core inflation, which excludes housing and private transportation costs, in September rose to 2% from a year earlier, the Singapore Department of Statistics said on Friday. That’s down from 2.2% the previous month and well below the median forecast of 2.3% in a Bloomberg survey.

The all-items inflation rate also stood at 2.2%, against the 2.4% expected by analysts.

Transport inflation eased to 7.4% in September, from the 8.1% notched in August. Meanwhile, food and housing inflation only crept up slightly to 2.4% and 1.4% respectively.

The Monetary Authority of Singapore (MAS), the central bank, last week narrowed its forecast for core inflation to 1.5%-2% for this year, from the previous projection of up to 2.5%, while seeing headline inflation coming in at around 2%. 

The MAS also signalled in its policy decision that both gauges could remain slightly elevated in the months ahead, with global energy prices rising anew and food costs hit by adverse weather. 

The central bank, though, unexpectedly held fire on tightening policy, saying steps taken earlier this year are sufficient to “lean against the anticipated near-term rise in imported inflation”.

Both core and headline inflation are seen averaging 1.5%-2.5% next year, with import costs and supply disruptions to energy and food ebbing, according to the central bank. Domestic price pressures should stay subdued, also aided by government subsidies to health and education.

Uploaded by Tham Yek Lee