Core inflation in Singapore accelerated faster than expected to the highest in a decade, in sync with the central bank’s projections that price growth might worsen before it gets better on geopolitical shocks and supply-chain backlogs.
The core consumer price index (CPI) tracked by the Monetary Authority of Singapore (MAS) — which excludes private transport and accommodation costs — rose 2.9 percent last month, on the back of costlier food and services. That is the fastest since March 2012 and is showing a quickening for the past eight of nine months.
That compares with the median forecast in a Bloomberg survey for a 2.5 percent increase, and the 2.2 percent pace in February.
Photo: Bloomberg
“External inflationary pressures have intensified amid sharp increases in global commodity prices and renewed supply chain disruptions driven by both the Russia-Ukraine conflict and the regional pandemic situation,” the MAS and the Singaporean Ministry of Trade and Industry said in a joint statement yesterday. “MAS core inflation is forecast to pick up further in the coming months, before moderating towards the end of the year as some of the external inflationary pressures recede.”
Singapore’s headline inflation last month rose by 5.4 percent from a year earlier, compared with estimates for a 4.7 percent increase and February’s 4.3 percent.
Among drivers of the all-items index were transportation costs, which picked up at the fastest pace since 1980.
The MAS and ministry reiterated estimates that core inflation should be between 2.5 and 3.5 percent this year, while headline inflation runs within 4.5 and 5.5 percent.
The figures followed the central bank’s decision earlier this month to tighten monetary policy for a third time since October last year, as it warned inflation pressures remain a risk in the medium term.
Singaporean officials have recently been warning that the inflation could be longer-lasting as part of a new economic reality, beyond immediate supply and demand shocks.
Tharman Shanmugaratnam, MAS chairman and a senior minister, said at a Boao Forum for Asia event on Friday that “we are dealing with a fundamentally new macroeconomic environment globally.”
The new environment requires big spending on new supply capacity, mobilizing and “de-risking” private capital to invest in emerging economies, and raising taxes in both advanced and emerging economies, Tharman said.
Separately, the Bank of Korea should stay on a path to policy normalization as inflation remains a more pressing concern than a slowdown in economic growth, Governor Rhee Chang-yong said.
“I’m more worried about inflation so far,” the newly installed governor said yesterday in his first meeting with media since taking office last week. “I’ll still need to look at the data to tell what the pace of interest-rate hikes should be.”
Rhee said last week in his parliamentary hearing that he favors higher interest rates unless there is a threat to the economic outlook.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
RSS