MAS cuts inflation forecast to 1.5%-2.5%
The Monetary Authority of Singapore, MAS, has lowered its headline inflation outlook to between 1.5 and 2.5 per cent this year due to decreased cost pressures from accommodation and private road transport.
The previous forecast was between two and three per cent.
The central bank said imputed rentals on owner-occupied accommodation are now expected to stabilise this year amid the large supply of newly-completed housing units.
In its half yearly monetary policy statement, MAS also said that car prices should add negligibly to inflation, although there could be upward pressure in coming months due to the low base a year ago when COE premiums fell.
Singapore's headline inflation averaged 2.4 per cent for the whole of 2013, down from 4.6 per cent in 2012.
But while MAS sounded benign on car prices and accommodation, it warned of domestic cost pressures stemming from a tight labour market.
This it said could lead to broad-based price increases across the economy.
Accordingly, MAS core inflation -- which excludes accommodation and private road transport -- is expected to average 2 to 3 per cent in 2014, up from 1.7 per cent in 2013
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