Inflation to stay above the 3% mark, says analyst

And the island country awaits as headline inflation data for May is due today.

DBS Group Research said, "The reading of the price barometer will most certainly bring some sigh of relief for policymakers amid the rising downside risk to growth."

Here's more:

CPI inflation is expected to report a 4.1% YoY increase, down from 4.5% in the previous months. Base effect from the high COE prices will gradually get eroded away, leading to lower transport CPI inflation. Moderations in both global fuel and food prices in the month may also bring about lower food and energy related inflation. That said, inflation will stay above the 3% mark for the rest of the year. Higher labour costs will eventually get passed on to end consumers. A tight labour with unemployment rate at 1.9%, below the full employment level, will drive wages higher. A stricter foreign labour policy along with hikes in employer CPF contribution rate will surely contribute further to wage inflation. The risk is that such wage driven inflation pressure could prove to be more persistent and broadbased. Latest employment data has shown that there are more jobs available than unemployed person. Specifically, there are 1.39 job vacancies for every one unemployed person. The upward pressure on wages and consequently on inflation will be the key factor keeping inflation above the historical norm going forward.

Also Read

Singapore ranks second in global economic freedom

Economists forecast modest NODX growth for Singapore in 2024

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit