SINGAPORE – Singapore’s key consumer price gauge rose again in August at its fastest pace in more than 13 years, official data showed on Friday, driving market expectations the central bank will consider another policy tightening move next month.
The rise in inflation was mainly due to larger increases in the prices of services and food, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry said in a statement.
The core inflation rate — the central bank’s favored price measure – rose to 5.1 percent in August on a year-on-year basis. A Reuters poll of economists had forecast a 5 -percent increase.
Headline inflation rose to 7.5 percent, beating economists’ forecast of 7.2 percent.
Singapore’s monthly inflation rate has remained elevated in recent months, and economists widely expect MAS to tighten policy at its scheduled review next month.
“Despite weak (economic) growth, MAS will be forced by the continued upward trend in inflation to tighten in October,” Maybank Kim Eng economist Lee Ju Ye said after the August data.
The core and headline inflation rates were 4.8 percent and 7 percent respectively in July.
Singapore’s central bank has tightened its monetary policy three times this year, twice in surprise moves in January and July. It typically publishes two scheduled monetary policy statements a year, in April and October.
The MAS’ core inflation forecast for this year is between 3 percent and 4 percent, while headline inflation is expected to be between 5 percent and 6 percent.
Several central banks across the world, including in the United States, have hiked their interest rates again this week to combat inflation.