Singaporean inflation data for the month of September is set to release tomorrow. According to a DBS Bank research report, the headline consumer price inflation is likely to have remained stable at 0.5 percent on a year-on-year basis, unchanged from the prior month. Beside a weak external inflationary environment, domestic price pressure has been exceptionally soft amidst deceleration in growth momentum.
Output gap has turned negative, implying a lack of demand-pull price pressure. While the economy might have averted a technical recession, growth impetus might stay soft. Furthermore, the Open Electricity Market reform has been successful in lowering electricity tariffs.
“This has prompted our view that inflation will remain benign and average just 0.5 percent this year, almost unchanged from 0.4 percent in the previous year”, added DBS Bank.
