Oil, El Niño, AI Pose Risks to Singapore Inflation

Dow Jones
09/23

0742 GMT - Singapore inflation risks remain tilted to the upside, keeping the next central bank meeting live, ING economists say. Core inflation strengthened in August, and ING reckons it will accelerate further in the coming months as U.S.-Iran conflict uncertainty will likely keep global energy prices elevated. That boosts the risk of further pass-through into Singapore goods and services prices, ING's Deepali Bhargava says. A severe El Niño weather shock could also push up imported food costs--an acute pain point given Singapore's heavy reliance on imports. Robust AI-related investment activity could meanwhile stoke inflation on the services front. MAS surprised markets by tightening slightly in July, and ING doesn't rule out a further modest move in October.

 

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