Inflation here held steady in November: Poll

PHOTO: Inflation here held steady in November: Poll

SINGAPORE - Singapore's inflation held steady last month as a jump in car prices was offset by a slower rise in housing and food prices, a Reuters poll showed.

According to the median forecast of nine economists, Singapore's consumer price index (CPI) likely rose by 4 per cent last month from a year ago, the same pace as in October, but still well above historical levels of 2-3 per cent.

"Favourable base comparisons are keeping the yearly rate stable despite a 0.5 per cent monthly increase in headline prices," said ANZ's head of economics for South-east Asia, Aninda Mitra.

Economists say that although headline inflation has slowed from a high of 5.4 per cent in April, helped by a fall in fuel prices and high year-ago base, Singapore faces pressures arising from a tight job market that has pushed up the cost of services.

For example, healthcare costs rose 5.2 per cent in October from a year ago, faster than the average of 4.4 per cent for the first 10 months of the year.

In the first 10 months of this year, inflation averaged 4.7 per cent compared with a year ago.

Singapore has been suffering from higher-than-usual inflation over the past two years, led by a spike in housing rents and car prices.

Due to the soaring price of certificates of entitlement (COEs) that are needed to sell a new car, a new Toyota Vios now costs around $125,000, up from about $74,000 at the start of the year.

Singapore's economy contracted by 5.9 per cent in the third quarter from April-June on an annualised and seasonally adjusted rate.

But employers are struggling to fill lower-end positions such as waiters and cleaners, due to government measures that make it harder for employers to hire cheap labour from abroad.

According to the Manpower Ministry, Singapore's unemployment rate stood at 1.9 per cent in the third quarter of the year, down from 2 per cent in the April to June period.

Singapore's central bank expects headline inflation for this year to come in slightly above 4.5 per cent before slowing to 3.5 to 4.5 per cent next year.