Singapore’s inflation slowed to a two-year low in November as gains in housing and transportation costs eased.
The consumer price index rose 3.6 percent from a year earlier, after climbing 4 percent in October, the Department of Statistics said in a statement today. The median estimate of 15 economists in a Bloomberg News survey was for a 3.8 percent increase. The November core inflation rate was 2 percent.
The Southeast Asian nation tightened monetary policy in 2012 while neighbors from Thailand to the Philippines cut interest rates, spurring gains in the currency even as the government predicts gross domestic product will rise at the slowest pace in three years. The Monetary Authority of Singapore forecasts inflation will average more than 4.5 percent this year and will be in a 3.5 percent-to-4.5 percent range in 2013.
“We expect goods price inflation to remain benign, including food prices,” Joey Chew, a Singapore-based regional economist at Barclays Plc, said before the report. While price gains are expected to slow next year, “given MAS’s bias to stabilize inflation and manage inflation expectations, the bar for loosening policy is higher than it is for tightening.”
The island’s economy may expand about 1.5 percent this year, at the lower end of the government’s previous forecast, as faltering demand for goods weighs on its economy, the Trade Ministry said last month.
“Given continued weakness in the global economy, imported inflation will be generally benign,” the Trade Ministry and the central bank said in a statement today. “Meanwhile, the persistent tightness in the labor market will support wage increases in 2013, some of which will continue to be passed through to consumer prices.”
The Singapore dollar has risen more than 5.5 percent in the past 12 months, the second-best performer among 11 Asian currencies tracked by Bloomberg.
Consumer prices rose 0.1 percent last month from October, today’s report showed.