Singapore’s core inflation expected to ease to 2.2% by December: Nomura

Core inflation rose 2.8% in September.

Core inflation is projected to ease over the coming months due to easing imported price pressures and wage pass-through effects, according to Nomura.

In its recent report, Nomura expects core inflation to moderate to 2.2% by December, aligning with the Monetary Authority of Singapore’s (MAS) forecast of around 2% by year-end and potentially falling below 2.0% in early 2025.

Nomura has maintained its core inflation forecasts of 2.8% for 2024 (MAS range: 2.5%-3.0%) and 1.8% for 2025 (MAS range: 1.5%-2.5%). Core inflation rose slightly YoY in September to 2.8% due to temporary increases in education and insurance costs.

It also maintained its GDP growth forecast of 3.4% YoY in 2024, exceeding the consensus of 2.7%, supported by a rebound in global tech demand that is boosting the country’s manufacturing output.

GDP growth for the third quarter is expected to reach 4.8% YoY, indicating a substantial upward revision from the government’s initial estimate of 4.1%.

Given these trends, Nomura expects the government to revise the 2024 GDP forecast range to 3%-3.5% in November from 2%-3% currently.

Donald Trump’s recent election win in the U.S. polls, however, poses some downside risk to the 2025 growth outlook of 2.5%, as it could lead to heightened global trade protectionism.