| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| CPI - M/M | 0.3% | 0.0% | ||
| CPI - Y/Y | 1.6% | 1.6% | 1.6% | 1.5% to 1.7% |
| Core CPI - M/M | 0.5% | 0.0% | ||
| Core CPI - Y/Y | 1.8% | 1.9% |
Highlights
Singapore's headline consumer price index rose 1.6 percent on the year in December, unchanged from the increase recorded in November. The index rose 0.3 percent on the month after no change previously. The Monetary Authority of Singapore's preferred measure of core inflation, which excludes the cost of accommodation and private road transport, eased from 1.9 percent in November to 1.8 percent in December. This index rose 0.5 percent on the month after no change previously.
The fall in core inflation in December was largely driven by a smaller increase in prices of services, up 1.8 percent on the year after a previous increase of 2.2 percent, while private transport costs fell 0.1 percent on the year after a previous decline of 0.7 percent. Price increases were little changed in other categories.
Officials at the MAS retained their target for appreciation of Singapore's exchange rate at their last quarterly meeting. They advised then that expect core inflation will remain subdued for the rest of the year and to average around 2 percent in 2025. Based on this assessment, officials concluded that"monetary policy settings are for now still consistent with medium-term price stability". Their next meeting is scheduled to take place later in the week.
The fall in core inflation in December was largely driven by a smaller increase in prices of services, up 1.8 percent on the year after a previous increase of 2.2 percent, while private transport costs fell 0.1 percent on the year after a previous decline of 0.7 percent. Price increases were little changed in other categories.
Officials at the MAS retained their target for appreciation of Singapore's exchange rate at their last quarterly meeting. They advised then that expect core inflation will remain subdued for the rest of the year and to average around 2 percent in 2025. Based on this assessment, officials concluded that"monetary policy settings are for now still consistent with medium-term price stability". Their next meeting is scheduled to take place later in the week.
Market Consensus Before Announcement
Annual CPI inflation is expected unchanged at 1.6 percent in December from November.
Definition
The Consumer Price Index (CPI) measures the average price changes in a fixed basket of consumption goods and services commonly purchased by the resident households over time. It is commonly used as a measure of consumer price inflation.
The CPI is rebased once every five years to reflect the latest consumption patterns and composition of goods and services consumed by resident households. The weighting pattern for the 2014-based CPI was derived from the expenditure values collected in the Household Expenditure Survey (HES) which was conducted from October 2012 to September 2013. These expenditure values were updated to 2014 values by taking into account price changes between 2012/13 and 2014.
The CPI covers only consumption expenditure incurred by resident households. It excludes non-consumption expenditures such as loan repayments, income taxes, purchases of houses, shares, and other financial assets etc.
The CPI is rebased once every five years to reflect the latest consumption patterns and composition of goods and services consumed by resident households. The weighting pattern for the 2014-based CPI was derived from the expenditure values collected in the Household Expenditure Survey (HES) which was conducted from October 2012 to September 2013. These expenditure values were updated to 2014 values by taking into account price changes between 2012/13 and 2014.
The CPI covers only consumption expenditure incurred by resident households. It excludes non-consumption expenditures such as loan repayments, income taxes, purchases of houses, shares, and other financial assets etc.
Description
An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets and your investments.
Inflation (along with various risks) basically explains how interest rates are set on everything from mortgages and auto loans to government securities. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
Inflation (along with various risks) basically explains how interest rates are set on everything from mortgages and auto loans to government securities. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
