Thursday November 05, 2009

Singapore inflation rate negative for 6 months as CPI falls to -0.4% in Sep 2009

This article belongs to the Singapore inflation watch story arc.

channelnewsasia.com :

Singapore's inflation rate as measured by the consumer price index (CPI) fell for the 6th consecutive month in Sep 2009. Data from the Statistics Department showed that consumer prices fell 0.4% from a year ago, mainly due to lower costs of housing, recreation and transport. Housing costs went down 2.5% due to lower electricity and gas tariffs, as well as cheaper liquefied petroleum gas. For the 9 months to Sep 2009, consumer prices rose 0.4% compared to a year earlier.

- Enjoy the current rate of inflation while it lasts. I said pretty much the same thing a while back. Now, with the Singapore property market apparently doing its recovery thing, and crude oil prices having bounced off the lows of $32.40 to test the $80 level currently, look out for the average rate of inflation to start picking up again in the near future.

As usual, it's a confluence of various factors. An obvious driver is the economic recovery factor, with money supply being a less obvious but equally important factor. If we're talking about real inflation, it does take two to clap : the money supply growth rate as compared to the economic growth rate. Or, vice versa, rate of decline, if that were the case. For now the current inflation rate is in negative territory, but with the torrent of money now starting to work its way into the economy, don't expect that to last too long. The inflation current may well come in and sweep people away by surprise. Watch for it.

See also :

1. Singapore CPI inflation rate hits 6.7% for Mar 2008, fastest in 26 years
2. Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
3. Singapore economy in recession, GDP contracts 6.3% in Q3 2008, MAS ends currency gain policy
4. Singapore inflation rate slows to 2.9% amidst recession and falling demand

(2009-11-05 12:04:05 SGT) [Biz] Permalink

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