Singapore's key consumer price gauge rose 5.1% in October. But this is all right, especially since it is slightly below the official forecast. So as of this Thursday, it can be seen that there have been smaller increases in prices of utilities, retails, other goods, and services.

The central bank favored price measures and stated that there was an increase of 5.1% on a year-on-year basis. Meanwhile, last September, inflation rose by 5.3%, which made the central bank's target for inflation in October not increase from that figure.

Meanwhile, some officials stated they were already prepared if inflation in Singapore increased to 6.7% or even 7.5%. However, because now the inflation rate is still about 5%, the central bank will try to maintain it until the rest of 2022.

On the other hand, this price increase involves something other than accommodation and private transport costs. On the headline consumer price index, overall, moderation in core inflation is still stable.

Singapore's Core Inflation Eases Slightly in Q3, But GDP Growth to Ease in 2023

"Core inflation is projected to stay elevated in the next few quarters before slowing more in H2 2023. Current tightness in the domestic labor market also eases, so global inflation is moderate," said the Monetary Authority and the Ministry of Trade and Industry.

In their outlook, MAS and MTI state that supply chain frictions will continue to ease because that is one of the best ways to make ongoing supply constraints and energy and food commodities come off the peak to become major advanced economies.

And this moderate global inflation does not exist in demand conditions, so it still has to be softened. Meanwhile, on the domestic front, the cost of utilities will continue to increase alongside robust wage growth. 

This transitory effect is due to the upside risk to the inflation outlook. It is noted that global commodity prices will be more persistent, which will be a good start for the SG economy.

Many headlines concern the global commodity prices because Singapore's foreeast economic growth will slow down in 2023. Global pressure would hit, so industries such as trade and finance would be most directly affected.

The Central Bank and Officials note that this Southeast Asian Financial hub's GDP will rise by 0.5% to 2.5% next year, below the official target of 3.5%. According to economists, if there is growth in the trade, finance, and insurance sectors, Singapore's 2023 outlook can improve.

However, if they continue to maintain their current monetary policy, it will only last until the fourth month of 2023. After that, dominant market pressures such as the United States, Europe, and China will create weaker offsets and require a strong recovery.

Officials also warned that "significant uncertainties and downside risks in the global economy will continue to persist. Singapore's external demand outlook has softened further. Growth rates in most economies are expected to moderate further with sharp slowdowns,"

Singapore Dollar Still Slips as Growth Forecast Disappoints

Singapore's trade ministry also added that the global supply disruptions are likely to continue into 2023 as the war drags on. Meanwhile, efforts will be made to make the frequency of disruptions easier. However, the target may be the first to overcome the Singapore Dollar.

This is necessary because the Singapore dollar and stocks consistently lose 0.2% daily value. Activity and service sectors need recovery. If this continues, the forecast also states that in 2023, the value of the Singapore dollar could decrease by 3.5% on a year-on-year basis.

Singapore tightened its monetary policy last month, which is how it deals with inflation. Two straight sessions of losses against Southeast Asian currencies made the SGD fall drastically. However, the good news is that Singapore can bring lower-than-target inflation.