Poll - Singapore CPI seen escaping deflation in October
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A customer pays for shrimp at a wet market in Singapore March 23, 2016. REUTERS/Edgar Su/File Photo
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SINGAPORE (Reuters) - Singapore's consumer price index (CPI) is likely to be flat in October from a year earlier, escaping deflation for the first time in two years, helped by recent gains in global oil prices, a Reuters poll showed.
The median forecast in a Reuters survey of 17 economists was for the all-items CPI to be steady in October from a year earlier, after declining 0.2 percent in September.
Such a result would end a record 23 straight months of year-on-year declines in all-items CPI that began in November 2014. Headline CPI has been dragged down over the past two years by lower global oil prices as well as falls in housing rents and private transport costs.
Downward pressure on CPI has become less acute in recent months, as global oil prices
While headline CPI will probably turn positive soon and core inflation is expected to edge higher in 2017, Singapore's central bank is unlikely to be in any hurry to tighten monetary policy, said Brian Tan, an economist for Nomura.
If full-year core inflation comes in near 1.5 percent next year, there won't be much reason for the central bank to consider tightening its exchange-rate based policy, given how weak the economy is, Tan said.
"The question really is whether we will go much higher than that, because I think historically core inflation has been closer to about 2 percent," he added.
In the Reuters survey, core CPI was forecast to have risen 1.2 percent in October from a year earlier, in what would be the fastest increase since February 2015, when it gained 1.3 percent.
The central bank's core inflation measure excludes changes in the prices of cars and accommodation, which are influenced more by government policies.
Singapore's central bank kept its exchange-rate based monetary policy unchanged at the semiannual policy decision in October. But some analysts say the weak growth outlook will likely force policymakers to ease further at the next meeting due in April.
(Reporting by Masayuki Kitano; Editing by Richard Borsuk)
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