Services inflation fell mainly due to smaller increases in the costs of holiday expenses and healthcare services. Electricity & gas saw a moderation in inflation as the price of electricity and gas rose at a slower pace. Retail & other goods inflation eased mainly from the drop in clothing and footwear prices as well as lower prices for medicines and health products.
Headline inflation and core inflation both fell by 0.3% on a m-o-m basis.
The MAS and Ministry of Trade and Industry (MTI) have kept their guidance with core inflation expected to reach around 2% by the end of 2024 and average between 2.5% to 3% in 2024. Core inflation is expected to drop to 1.5% to 2.5% in 2025.
At the same time, the ministries except accommodation inflation to come in lower in 2025 as leasing demand moderates. This should offset a pickup in private transport inflation amid still-firm demand for cars. With this, headline inflation is expected to come in around 2.5% for 2024 and at an average range of 1.5% to 2.5% in 2025, unchanged from September’s outlook.
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MAS and MTI continue to see risks to its inflation outlook as “relatively balanced”.
