Core inflation to average 1-2% in 2017

And CPI-All Items inflation is projected to pick up to 0.5–1.5%.

According to the Monetary Authority of Singapore (MAS), on the external front, imported inflation is likely to rise modestly on the back of a turnaround in global commodity markets.

“In particular, global oil prices are expected to average higher in 2017 as compared to last year, although upward pressures would be capped by existing inventories as well as an anticipated increase in US crude oil output,” it said.

Here’s more from MAS:

Domestically, overall price pressures should be muted. Amidst a pullback in hiring, conditions in the labour market have slackened. This will cap underlying wage growth, even as non-labour business costs have eased. The subdued growth environment will also constrain the extent of cost pass-through to consumer prices.

For the whole of 2017, MAS Core Inflation is expected to average 1–2%, compared with 0.9% in 2016. CPI-All Items inflation is projected to pick up to 0.5–1.5% this year, from -0.5% in 2016.

The firmer rate of inflation in 2017 largely reflects the contribution of energy-related components, as well as some administrative price increases, rather than generalised demand-induced price pressures.