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Chart of the Day: Singapore’s inflation to languish in the red
This will be the fourth consecutive month of negative inflation.
Concerns have been raised regarding deflation in Singapore, but analysts at DBS believe there is absolutely zero risk.
Inflation is expected to stay in negative territory this month, with the headline CPI inflation to register -0.2% YoY.
According to DBS, while growth may be slow and below potential (2.9% in 2014 versus 4.0% middle term potential growth rate), risk of a recession is still low at this juncture.
The labour market is still tight with unemployment rate at 1.9% as of end 2014.
Typically an unemployment rate of 2.0% will indicate that the economy is at full employment level.
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