FIRST OCBC Bank expects 2021 to be modestly positive amidst the rise in crude oil prices globally
Private transportation costs raised the overall inflation rate for the month
Inflation returns to local prices
T
he year started with prices picking up, with a 0.2% headline inflation in January. The increased costs of private transportation and accommodation made up for the lower prices of retail, food, services, and utilities. Experts believe this could set a trend for the coming months. Private transportation costs raised the overall inflation rate for the month, speeding up at 1.9% from the previous 1.2% due to a larger increase in car prices and softer decline in petrol prices as
global oil prices rose in January. Average COE premiums in the open category climbed to a 3-year high in Jan Costs will continue to rise as travel restrictions ease, according to Maybank. “Private transport costs will likely continue rising in the coming months with ERP rates increasing at 10 gantries by S$1 with effect from 22 February to manage congestion during peak periods as traffic recovers,” Maybank said in a report. It added that higher petrol rates could also lead to higher fares
for public transportation. In a joint statement, the Monetary Authority of Singapore and the Ministry of Trade said they expect increased inflation in domestic services as the economy recovers post-pandemic. Food prices have risen to 7-year highs mainly on the back of surge in palm oil and cereals. Meanwhile, house forecast for crude oil prices has been raised to US$55-60/barrel in 2021 following the stronger-than-expected performance year-to-date and improving global outlook with the COVID-19 vaccination rollout, according to Maybank. The government sets its expectations for headline inflation to stay within the -0.5% and 0.5% range in 2021. Maybank projects a higher figure at 0.8%. OCBC Bank expects the year to be “modestly positive” amidst the rise in crude oil prices globally. Should global oil prices stay at around US$55 per barrel, it expects a full-year inflation rate of 0.7%. An uptick in global oil prices to US$60 per barrel could drive headline inflation closer to 1% for the full year of 2021. Inflation slid by 0.2% for the full year of 2020, driven by lower costs in transportation, healthcare, clothing and footwear, housing and utilities, and education, and tempered by higher food costs.
THE CHARTIST: REMOTE TALENT LINES UP FOR SINGAPORE’S POSITIVE COVID RESPONSE The Lion City is Southeast Asia’s most favoured destination for remote work. Singapore has moved up 10 spots to 8th place in terms of being an attractive location for global talent worldwide, according to a new study by management consulting firm Boston Consulting Group (BCG) and recruitment platform alliance The Network. Malaysia, South Korea, New Zealand, Australia, and Japan have also ranked in terms of being attractive locations for global talent. Whilst the city-state is Southeast Asia’s “most favoured destination” for remote employment (9th
worldwide), employees willing to work for a foreign company remotely is notably lower than the global average, with only 51% of Singaporeans agreeing to do so. Southeast Asia has also seen a notable decline in candidates’ willingness to move abroad, with only 44% of respondents in Singapore expressing so, down from 70% in 2018. “The pandemic has transformed the attitudes of global talent, with the fall in respondents expressing an ambition to move abroad particularly acute in Southeast Asia,” said Ming Teck Kong, managing director at BCG.
Ranking of countries in terms of their COVID-19 caseload
Source: Legatum Institute
SINGAPORE BUSINESS REVIEW | JUNE 2021
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