As the new week unfolds, investors are gearing up for a wave of local economic data releases in Singapore. Key among these are the April 2024 Inflation Rate and Core Inflation Rate, which will provide insights into the country’s price stability and economic health. In March 2024, Singapore’s inflation rate slowed to 2.7% year-on-year (yoy), below market expectations of 3.1%, largely due to a decline in private transport costs and lower core inflation.
The Consumer Price Index (CPI) in Singapore measures the average price changes over time of a fixed basket of consumption goods and services commonly purchased by the resident households. Core inflation excludes the components of “accommodation” and “private transport”, which are influenced by government policy.
In March, the core inflation rate fell to 3.1% yoy, driven by lower food and services inflation. The Monetary Authority of Singapore (MAS) expects core inflation to average between 2.5% to 3.5% for 2024, down from 4.2% in 2023. Following March’s data, CGS International has maintained its 2024 CPI forecast at 2.9% yoy.
Another significant data release is the Singapore’s first quarter of 2024 (Q1 2024) GDP Growth Rate. Based on advance estimates from the Ministry of Trade and Industry (MTI), Singapore’s economy grew by 2.7% yoy in Q1 2024. Singapore’s economy grew by 1.1% in 2023 and has maintained its 2024 growth forecast at a range of 1% to 3%.
Additionally, Singapore’s April 2024 Industrial Production data is anticipated, following a sharp 9.2% yoy decline in March 2024, the biggest drop in seven months and far worse than the 1.5% decline forecasted by analysts. The data measures the output of businesses integrated in the manufacturing sector of the economy.
Investors are also keenly awaiting FY2024 results from Singapore Telecommunications Ltd (SGX: Z74), known as SingTel. Based on CGS International’s analysis, Singtel might announce a return of cash to shareholders, potentially through special dividends or large share buybacks, given its elevated cash and equivalents balance of circa S$4 billion as of end-March 2024. We reiterate an ‘add’ rating on SingTel stock, as we see a healthy FY2025 forecast earnings growth of 12%.
On the global front, investors will be looking at the Federal Open Market Committee (FOMC) Meeting Minutes for insights into future interest rate decisions. The FOMC Meeting Minutes are a detailed record of the committee’s policy-setting meeting held about three weeks earlier. The US will also release its April data for Existing and New Home Sales, Durable Goods Orders, and the latest S&P Global US Manufacturing and Services PMI.
In China, investors anticipate the announcement of China’s Loan Prime Rate (LPR), which is the lending benchmark for new bank loans to households and businesses. The People’s Bank of China (PBOC) left key lending rates unchanged at the April fixing, in line with market expectations. The PBOC kept its one-year LPR at 3.45%, while the five-year LPR, used to set mortgage rates, was left at 3.95%.
In conclusion, key economic data releases and earnings in Singapore this week include April inflation rates, Q1 GDP growth, and SingTel’s FY2024 results. Globally, significant data such as the FOMC Meeting Minutes and various US economic indicators will also capture attention, alongside China’s Loan Prime Rate announcement.
References
CGSI – Singapore Economics Update (April 2024)
CGSI – SingTel Company Note (May 2024)
Announcement on Loan Prime Rate (April 22, 2024)
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
