- The Monetary Authority of Singapore (MAS) reported that the Core Inflation rate fell to 3.0% in year-on-year (YoY) terms in September 2023, making a drop from the previous month’s 3.4%.
- Despite an easing in Core Inflation, the Consumer Price Index (CPI) recorded an increase. It rose to 4.1% YoY in September 2023, up from August’s 4.0%.
The crux of the matter is simple.
Inflation is the bad boy on the economic playground.
When it starts throwing its weight around, prices rise, from the bread for your breakfast to the bus ride home.
And recently in Singapore, this bad boy has been getting rowdier.
How Does the Inflation Playground Look in 2023?
The MAS reports a lessening wind in inflation’s sails.
MTI reveals that core inflation YoY fell in September 2023, cooling to 3.0% from its August score of 3.4%.
But the Consumer Price Index (CPI) – the shopping basket price measure – edged up to 4.1% YoY in September.
That’s 0.1% higher than August.
Does that sound like double Dutch to you?
Let’s break it down.
Core inflation looks at the steady, long-term trend.
It shakes out volatile day-to-day changes like petrol and energy prices.
The CPI, however, counts everything including chips and dip, your morning coffee, and your bus fare.
Got it?
What Does the Previous Year Tell Us?
Turn back the clock and you’ll see inflation doing a seesaw act.
Just compare the pace now to last year!
This year’s core inflation is the slowest since March 2022 – that’s like the tortoise in the famed race.
On the flip side, the CPI growth matches pace with the hare, reinstating how the true bespoke nature of this playground plays out.
According to SingStat, “The Singapore Consumer Price Index (CPI) for September 2023 shows a year-on-year increase of 4.1% for all items.”
That’s a speedier gallop than the previous year, isn’t it?
How Does this Inflation Fair Tug at Your Pocket?
The rising inflation rate yanks your wallet-strings in every way.
From the price bagging your groceries to paying the taxi fare, it affects all.
And when the CPI increases, you feel the pinch on your everyday purchases.
Your utility bills might give you a surprise, with housing and utility prices increasing by 3.7%.
Your groceries too!
Foods’ cost has risen by 4.3% YoY.
Ouch!
The saving grace is clothing and footwear have cheaper tags now, going down by 1.7% YoY.
What’s the Singapore Government Doing About this Playground Bully?
Like any wise playground supervisor, the Monetary Authority of Singapore (MAS) isn’t ignoring the bully.
They’re taking measures to control it.
The expectation is that CPI inflation will increase in the coming months due to costlier Certificate of Entitlement premiums.
But there’s hope yet!
It will slowly drop in 2024.
Even the housing inflation will relax as more housing units complete.
The schoolyard might become peaceful again!
What’s the Word on the Future?
Financial seers are peering into the crystal ball and penning down predictions.
For 2023, the forecast is that the CPI inflation will average around 5%, and MAS Core Inflation about 4%.
“Although crude oil prices have risen in recent months, global prices for most food commodities, as well as for intermediate and final manufactured goods, have continued to moderate,” says MTI.
But the consensus is 2024 will see prices hiking less.
The headline and core inflation are expected to average 3.0-4.0% and 2.5-3.5% respectively.
Times are changing, folks.
The winds of inflation are blowing, which way they’ll sway, only tomorrow can tell.
Here’s a final food for thought – how are you planning to dodge the playground bully called inflation in the coming months?
The bad boy sure seems ready to throw more tantrums!
Do you have your game plan ready?
