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During lunchtime at Singapore’s Raffles Place, the city-state’s economic landscape is drawing attention as it faces challenges related to inflation and economic growth.
According to official data released in March, Singapore’s inflation rate remains at its lowest point in over four years, with the consumer price index increasing by 0.9% year-on-year. This figure aligns with the inflation rate recorded in February and comes in below the expectations of analysts surveyed by Reuters, who had anticipated a rise of 1.1%.
A report from Singapore’s monetary authority highlights that the main contributors to the inflation increase in March were rising costs in food and private transportation. Month-on-month, the consumer price index showed a slight reduction of 0.1%.
In addition, the core inflation, which excludes private transport and accommodation costs, moderated to 0.5%, down from the previous month’s 0.6%. This deceleration is attributed to reduced inflation across various core categories, except for food.
This inflation data arrives as Singapore prepares for a general election scheduled for May 3, with campaigning officially starting as candidates file their nomination papers.
Prime Minister Lawrence Wong addressed the nation in a recent video, acknowledging that the pressures of living costs are a significant issue. He cited external factors contributing to these challenges, including conflicts in Europe and the Middle East, disruptions in global supply chains, and rising tariffs amid ongoing trade disputes.
In light of these economic pressures, Singapore’s central bank has implemented a second consecutive monetary easing earlier in April. This action reflects concerns over potential zero growth for the year, following a disappointing first-quarter GDP growth rate of 3.8%, which did not meet the expected 4.3% forecast from analysts.
The Ministry of Trade and Industry has adjusted its GDP growth projection for 2025 to a range of 0%-2%, a decrease from the previous estimate of 1%-3%. The monetary authority has similarly revised its growth forecast to align with this new outlook, projecting a similar range for the year ahead. In an official statement, the ministry indicated that this slowdown in growth is largely due to declines observed in the manufacturing sector, in addition to downturns in various services, including finance and insurance.
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