RHB Bank has announced that it will maintain its full-year inflation forecasts for Singapore, with headline inflation expected to remain at 2.5% and core inflation at 2.0%. Despite recent easing in geopolitical tensions and a decline in crude oil prices, the bank warns of potential upside risks due to global cost pressures. Barnabas Gan, Group Chief Economist and Head of Market Research at RHB Bank, highlighted the need for continued monitoring of inflation dynamics.
The bank’s report indicates that Singapore’s future inflation trajectory will be influenced by several factors, including fluctuations in global commodity prices, elevated cost-push inflation, and potential increases in food prices due to weather disruptions. These elements could contribute to an upward bias in inflation forecasts.
In May, Singapore’s headline inflation remained steady at 1.8% year-on-year, unchanged from April. This figure was lower than RHB’s in-house projection of 2.3% and Bloomberg’s consensus estimate of 2.0%. Core inflation also held steady at 1.4% year-on-year.
RHB’s decision to maintain its inflation forecasts underscores the complex interplay of global economic factors affecting Singapore. As the situation evolves, the bank will continue to assess the impact of these variables on the country’s inflation outlook.
