Singapore's core inflation pegged to hit 2.4% in 2014

Spurred by admin, employment curbs.

According to UOB Economic-Treasury Research's quarterly global utlook, due to the more rigid administrative measures and still-tight labour market conditions, a pick up of inflation in the service sectors will likely push Singapore's headline inflation higher.

It predicts 2014 headline and core inflation to come in at  3.3% and 2.4% respectively.

Here's more:

Higher private transport costs may be negated by a slower growth pace in the housing segment. With that, we are maintaining our headline inflation forecast of  2.6% in 2013, but will raise our core inflation forecast from 1.7% to 2% for 2013, as we think that core inflation will be facing some upward pressures in the months upcoming.

There are also risks of a pick-up in consumer prices coming from the supply side. The tighter domestic labour market condition, brought about by the increase in foreign workers levies in July 2013 and the stricter Employment Pass requirements announced by the Ministry of Manpower in September 2013 are key reasons.

Even before these measures were announced, unit labour costs had been on a rising trend since 1Q 2012 and had been growing at an average of 5% y/y every quarter.