SINGAPRE – Inflation rates have been climbing globally but they vary widely – from around 2 per cent in some countries to more than 10 per cent in others.
Given this wide spectrum, Singapore’s latest headline inflation or headline consumer price index (CPI) of 7 per cent sits somewhere in the middle.
It is not expected to breach the double-digit levels seen in places such as Brazil, Britain and the Netherlands, said OCBC Bank’s chief economist Selena Ling.
“For now, I expect Singapore’s headline CPI to top 7 per cent year on year, but is unlikely to cross to double-digit territory, barring fresh shocks to global commodity prices and wage-price spirals,” she said.
CIMB economist Song Seng Wun said that for Singapore’s CPI to go up to double digits, there must be a significant jump in services inflation that would be driven by higher wages, services costs, rentals and certificate of entitlement prices, among others.
He noted that the difficulty in estimating CPI is that not all businesses pass on the higher costs of goods to consumers at the same time.
That said, Mr Song thinks Singapore’s fourth-quarter year-on-year inflation might possibly dip on the back of a higher base of comparison.
He pointed out that inflation rates can vary widely because the basket of goods and services used to measure headline inflation differs from country to country.
This is particularly true of the bigger countries, where there are urban and rural areas.