Inflation set to fall for 23rd straight month: Poll

Singapore's consumer price index (CPI) is expected to have dropped for a 23rd straight month in September from a year earlier, although the rate of decline likely moderated from recent months, a Reuters poll showed.

The median forecast from a Reuters survey of 11 economists was for the all-items CPI to have fallen 0.2 per cent last month from a year ago, after declining 0.3 per cent in August.

That would be the smallest annual drop for the index since December 2014, when CPI fell 0.1 per cent.

Downward pressure on prices is expected to have moderated last month, with economists citing factors such as recent rises in the prices of car permits compared with levels earlier this year.

Headline CPI has been falling on an annual basis since November 2014, hit by lower global oil prices as well as falls in housing rents and private transport costs.

According to the Reuters survey, core CPI was forecast to have risen 1 per cent last month from a year earlier, the same pace as in August.

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

Last week, Singapore's central bank held policy steady, despite a surprisingly sharp economic contraction in the third quarter.

The Monetary Authority of Singapore uses the exchange rate as its main monetary policy tool to strike a balance between inflation from overseas and economic growth.

Some analysts said the weak inflation and growth outlook will likely force policymakers to ease further.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 22, 2016, with the headline 'Inflation set to fall for 23rd straight month: Poll'. Print Edition | Subscribe