Singapore CPI Rises to 10-Year High on War, Covid Disruptions




  • In Business
  • 2022-04-25 05:00:48Z
  • By Bloomberg

(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

Most Read from Bloomberg

  • Ukraine Latest: Zelenskiy Says Top U.S. Officials to Visit Kyiv

  • Ukraine Latest: U.S. Vows to Step Up Arms, Diplomacy in Kyiv

  • New Texts Shed Light on Elon Musk's 2018 Spat With Saudi Fund

  • Macron Beats Le Pen to Win Second Term as French President

  • Disney's $578 Million Tax Break Left Untouched in DeSantis Feud

Core inflation in Singapore accelerated faster than expected to the highest in a decade, in sync with the central bank's projections that price growth may worsen before it gets better on geopolitical shocks and supply-chain backlogs.

The core consumer price index tracked by the Monetary Authority of Singapore-- which excludes private transport and accommodation costs -- rose by 2.9% in March, on the back of costlier food and services. That's the fastest since March 2012 and is showing a quickening for the last eight of nine months.

That compares with the median forecast in a Bloomberg survey for a 2.5% increase, and the 2.2% pace in February.

"External inflationary pressures have intensified amid sharp increases in global commodity prices and renewed supply chain disruptions driven by both the Russia‐Ukraine conflict and the regional pandemic situation," the MAS and the Ministry of Trade and Industry said in a joint statement Monday. "MAS core inflation is forecast to pick up further in the coming months, before moderating towards the end of the year as some of the external inflationary pressures recede."

The figures come after the central bank's decision earlier this month to tighten monetary policy for a third time since October as it warned inflation pressures remain a risk in the medium term.

Read more: Singapore Dollar Rallies After Central Bank Ups Inflation Fight

The city-state's latest consumer price data also follow releases from the U.S., where inflation is cruising at a 40-year high, and Japan, where costs are picking up at the fastest in two years.

Federal Reserve Chair Jerome Powell has ramped up his hawkish tone, putting the world on guard for a potential 50 basis-point rate increase as early as May and joining a chorus of central bankers mulling "jumbo" rate hikes.

Central banks globally are facing an agonizing trade-off between growth and inflation, with risks for many economies that soaring costs, and policy efforts to cool them, can create financial instability and trip up growth, producing a dreaded stagflation scenario.

Singaporean officials have recently been warning that the inflation could be longer-lasting as part of a new economic reality, beyond immediate supply and demand shocks.

Tharman Shanmugaratnam, chairman of the MAS and a senior minister, said at a Boao Forum for Asia event on Friday that "we are dealing with a fundamentally new macroeconomic environment globally."

Tharman said the new environment requires big spending on new supply capacity, mobilizing and "de-risking" private capital to invest in emerging economies, and raising taxes in both advanced and emerging economies.

Read more: Tharman Warns of New Era of Shortages Driving Global Inflation

Singapore's headline inflation last month rose by 5.4% from a year ago, compared with estimates for a 4.7% increase and February's 4.3%. Among drivers of the all-items index were transportation costs, which picked up at the fastest pace since 1980.

The MAS and MTI on Monday reiterated estimates that core inflation should be between 2.5% and 3.5% this year, while headline inflation runs within 4.5% and 5.5%.

Most Read from Bloomberg Businessweek

  • Everything You Need to Know About Netflix's Big Miss

  • How WALL-E Predicted the Future

  • Alzheimer's Trials Exclude Black Patients at 'Astonishing' Rate

  • Beijing Crackdown Derails Alibaba's Bid for Amazon-Size Profit

  • Elon Musk Says He Has a Plan B for Twitter. Does He Have a Plan A?

©2022 Bloomberg L.P.

COMMENTS

More Related News

Russia Default Risk Surges as US Set to End Key Bond Waiver
Russia Default Risk Surges as US Set to End Key Bond Waiver

(Bloomberg) -- Russian default risk surged as investors reacted to the possibility that the Biden administration will fully block bond payments from the...

US Set to Block Russian Debt Payments, Raising Default Odds
US Set to Block Russian Debt Payments, Raising Default Odds

(Bloomberg) -- The Biden administration is poised to fully block Russian bond payments to US investors after a deadline expires next week, a move that could ...

Walmart-Backed PhonePe Buys Indian Wealth Management Firms
Walmart-Backed PhonePe Buys Indian Wealth Management Firms

(Bloomberg) -- PhonePe, an Indian payments company backed by Walmart Inc., will acquire two wealth management firms for a total enterprise value of $75...

Baidu
Baidu's Chip Affiliate Eyes Fundraise at $2.5 Billion Valuation

(Bloomberg) -- Baidu Inc.'s chip affiliate is looking to raise 2 billion yuan ($317 million) in a new funding round, people familiar with the matter said, as...

Goldman Sachs Cuts China
Goldman Sachs Cuts China's Growth Forecast to 4% on Covid Policy

(Bloomberg) -- Goldman Sachs Group Inc. cut its forecast for China's gross domestic product growth this year to 4% from 4.5%, citing worse-than-expected...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business