Alvin Tan on Singapore's inflation outlook

Singapore's inflation outlook this year is dependent on external and domestic factors, said Minister of State for Trade and Industry Alvin Tan. Externally, global inflation is likely to stay firm in the near term, as global energy and food commodity prices remain elevated despite coming off their peaks in 2022. Labour markets in advanced economies remain tight, thereby keeping pressure on wages. Domestically, businesses are likely to continue to pass through elevated import and utilities costs, along with rising labour costs. Inflation in Singapore is expected to remain elevated in the first half of 2023, before slowing down more discernibly in the second half as global inflation moderates and the current tight domestic labour market eases. For 2023, the CPI-All Items inflation is projected to come in at 5.5 per cent to 6.5 per cent, compared with 6.1 per cent in 2022. Over the same period, core inflation, which excludes accommodation and private transport costs, is expected to average between 3.5 per cent and 4.5 per cent, compared with 4.1 per cent in 2022. The Monetary Authority of Singapore remains watchful of the near-term risks to inflation and growth. It will review Singapore's monetary policy in April. Mr Tan gave this update in reply to an MP's questions in Parliament on Tuesday (Feb 7).