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Economist at UOB Group Barnabas Gan reviewed the latest inflation figures in Singapore.

Key Quotes

“Singapore’s inflation environment has eased further in April 2020. Headline consumer prices fell 0.7% y/y (-0.9% m/m sa), marking its second straight month of deflation. Core prices also fell by 0.3% y/y over the same period (versus -0.2% y/y in March 2020). This compares to market expectations for headline and core CPI to ease to -0.5% y/y. Singapore’s headline inflation grew at an average of 0.1% in the first four months of 2020, down from 0.6% in the same period last year.”

“Factors that dragged consumer prices in April were similar to that of March’s. The slowdown in consumer demand and lower commodity prices were the key factors that pressured inflation lower.”

“Official rhetoric as released in the accompanying inflation report continued to highlight a ‘subdued’ inflation outlook in 2020. The official report kept its rhetoric that ‘external sources of inflation are likely to remain benign’, while lower oil prices will ‘weigh on the prices of energy-related components in the CPI basket’.”

“We continue to expect a path of deflation for Singapore’s consumer prices in the year ahead. The city-state had already seen its second straight deflation print, and the last time Singapore saw such a phenomenon was in September – October 2016. Lower oil prices and deteriorating consumer demand will likely continue to drag down domestic prices… As such, we keep our full-year headline and core inflation at -0.3% in 2020.”