, Singapore

Why Singapore's COE-driven inflation could fade over time

Rentals on owner-occupied accommodation to rise gradually.

According to OCBC Treasury Research, the inflation drivers of owner-occupied accommodation and COE premiums are “unlikely to be sustained at the same pace”.

Imputed rentals on owner-occupied accommodation is expected to rise at a slower pace with greater supply coming on stream, while COE premiums may continue to rise in the short term as an adjustment to the pending re-categorisation of COEs.

Here's more:

However, MAS remains watchful on the inflationary front as “accumulated business costs pass through to consumer prices alongside the cyclical uplift in economic activity”, especially for consumer services prices, following the relatively weak pass-through in earlier quarters.

At this juncture, the growth and inflation trajectories are unlikely to deviate significantly from the official script, and hence the “steady as she goes” mantra still applies.
 

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