, Singapore

Singapore's 2012 inflation was 3rd highest reading since 1991

But here's some good news.

According to Barclays, Singapore’s inflation in 2013 will likely show an improvement from 2012 levels. Both headline and core inflation rates in 2012 were high at 4.6% and 2.5% respectively. 

For the headline rate, this was the third highest print since 1991, superseded only by 2008 (6.6%) and 2011 (5.2%).

The 2.5% core inflation rate was also significantly above the 1.7% historical average, and an acceleration from 2011’s 2.2%. Both inflation measures were above the GDP growth rate (1.2%) in 2012.

Here's more from Barclays:

In 2013, we are forecasting that the headline inflation rate will fall to 3.9% and core to 2.2%. These are in the lower half of MAS’s forecast ranges (3.5-4.5% for headline; 2-3% for core). Even so, they will be above the GDP growth rate again, based on our forecast (Barclays: 2%; government: 1-3%).

We think the government, MAS, consumers, and businesses will continue to view inflation as a problem in 2013.

This projected decline in inflation from 2012 levels partly reflects base effects, as we are expecting roughly similar sequential (q/q) rates of price rises, on average, as last year, particularly for services such as education and health care.

Base effects will be significant in the accommodation, housing fuel and public road transport categories in H1 13. These saw significant price hikes in the early part of 2012, but the pace of increase has since slowed, or in the case of electricity tariffs, fallen for three straight quarters.

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