Quick take: Negative inflation headlines in Singapore seen persisting in H1 2016
Singapore's inflation eased for the 13th straight month as latest figures show that headline inflation came in at -0.8 per cent in November, unchanged from October.
Core inflation, which excludes the costs of accommodation and private road transport, came in at 0.2 per cent compared to 0.3 per cent in the previous month, largely reflecting the lower food and services inflation.
Here are some comments by Weiwen Ng, economist, ASEAN and Pacific, ANZ Research:
"Headline inflation remains entrenched in negative territory, reinforced by the decline in oil price and sub-potential growth. We expect that negative headline prints to persist for the first half of 2016, suppressed by further softness in housing rentals and car prices."
"Still, Singapore is not in deflation with price declines concentrated in certain segments of the CPI basket rather than broad based."
"But to us, the risk is for further weakness in near-term inflation, with any rise next year not likely to head towards long-term average levels, especially if the growth outturn remains sub trend and crude oil prices treading near 11-year lows. Amid a tepid growth outlook and increased labour market slack, the undershoot in inflation profile from MAS baseline forecasts might prompt a further calibration in policy easing."
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