Singapore inflation predicted to cross the 3% mark next year

Will the MAS maintain its tightening bias?

According to DBS, witht heunderlying cost pressur ein the domestic economy still high, the trajectory of inflation is still up.

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We continue to maintain the view that inflation will cross the 3% level and could potentially touch the 4% mark after April next year. Average inflation for 2014 will register 3%, up from about 2.4% in 2013.

MAS to maintain tightening bias

With a better than expected outcome on the growth front int the third quarter, the MAS has unsurprisingly stood pat on policy with no change in the slope, width, and band of the policy band. Plainly, with the official GDP growth forecast for the year raised and growth likely to shift back to potential level the focus of the exchange rate policy will be on inflation in the coming months.