Food Prices push Inflation to 12.34% y/y in April 2020

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Earlier, the National Bureau of Statistics (NBS) released inflation figures for Apr-2020. Analyzing the report, the Headline inflation maintained an uptrend, increasing to 12.34% y/y, from 12.26% y/y in Mar-2020.

Notably, on a m/m basis, the headline inflation ticked upwards by 1.02% from 0.84% in Mar-2020. Explaining further, the 12 constituents of the index, including food, clothing, and others, all increased on a m/m basis. This can be attributed to supply-chain disruptions due to the COVID-19 lockdown and stockpiling.

Food Prices push Inflation to 12.34% y/y in April 2020 - Brand Spur

On a segmented basis, the Food inflation sub-index increased by 15.03% y/y from 14.98% y/y in Mar-2020. In terms of monthly food inflation, the same trend was observed, rising from 0.94% to 1.18% m/m.

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We believe the sustained shortfall in domestic food supply relative to demand, due to the planting season and continued closure of land borders, fueled the increases in food prices.

Elsewhere, the core inflation index inched higher by 9.98% y/y (vs 9.73% y/y in Mar-2020) and moved up from 0.80% to 0.93% m/m in April-2020. Notably, across the components of the core inflation sub-index, the highest increases were recorded in food and imported food.

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Meanwhile, Energy prices increased marginally, owning to continued stability in FX rates and capped PMS prices.

Inflation Outlook

In the month of May, we expect the pressure on the headline inflation rate to persist. The
fundamental drivers will remain food prices as interstate travel restriction and land border
closure, coupled with the fact that Nigeria is currently in the planting season remains part of the narrative.
Dissecting the core inflation, the pressure point remains an increase in prices of health care
products and services as well as transportation. In addition to that, the scarcity of FX and high rate at the parallel market, coupled with the global supply chain disruption will keep prices of household appliances and imported items high.
On the other hand, a decrease in PMS prices and restriction of movement in the month of May will reduce the impact on the core index.
Bearing all the above points in mind, we expect m/m inflation to tick up to 1.1% from 1.0%. In extension, we expect y/y inflation to increase from 12.34% to 12.38%.

United Capital Research

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Food Prices push Inflation to 12.34% y/y in April 2020 - Brand SpurFood Prices push Inflation to 12.34% y/y in April 2020 - Brand Spur

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Latest News

Singapore Employees Lack Retirement Support From Companies While Financial Wellbeing Becomes a Top Priority: Aon Survey

SINGAPORE - Media OutReach - 14 April 2021 - Aon plc (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, has released the findings of the 2021 Trends in Retirement & Financial Wellbeing survey for Singapore.


Working adults in Singapore ranked retirement planning as their top priority but an alarming 80% underestimate how much they really need to retire. While retirement support from employers is also lacking, further challenges remain around transparency in group retirement plans' investment offerings and employees foregoing long-term perspectives to seek short-term gains.


Ashley Palmer, Regional Managing Partner, Retirement & Investments, Asia for Aon, said, ""Employers can have a significant impact on how much their employees save by instilling smart habits and healthy money behaviours. The right long-term savings vehicles, effective communications and financial tools will help Singapore's workforce be more financially resilient in the wake of the COVID-19 pandemic."


The survey identifies three main themes in financial wellbeing and retirement support for Singapore employees.

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Financial wellbeing support is the new employee expectation. As a result, close to 40% of employers rank an employee financial wellbeing strategy as their highest priority, followed by emotional and mental wellbeing support. The survey shows that 70% of Singapore employers will formulate or execute financial wellbeing programmes throughout 2021, in line with employee expectations. Companies also view offering a financial wellbeing programme critical in increasing employee engagement and remaining competitive in the talent market.


There is an increasing trend of employer-led supplementary savings plans. Currently, 22% of companies surveyed offer Central Provident Fund (CPF) top-up contributions to citizens and Permanent Residents. But, close to 40% of the working population in Singapore are foreigners who do not have access to CPF and are likely to have foregone their retirement benefits in their home countries. To bridge this gap, and to provide equitable retirement benefits to all employee groups, close to 50% of the organisations surveyed offer supplementary retirement benefits to their foreign staff. Financial services firms are leading in this practice, followed by the technology and the healthcare sectors.


Promisingly, a third of organisations in Singapore are prioritising a thorough review of their supplementary retirement arrangements in 2021.


Alicia Brittain, Senior Consultant & Actuary, Retirement & Investments, Singapore for Aon, said, "Forward-looking companies first need to understand the financial worries of their employees and identify the gaps in their benefits offering. The most effective approaches are aimed at changing individual behaviours towards money and savings and providing accessible programmes and vehicles to deliver sustainable change. For example, when organisations provide retirement benefits as cash-in-lieu, it is most likely immediately spent and so does not form part of an emergency fund or long-term savings for the employees' retirement years. Supplementary retirement plans solve this issue and are more flexible and cost effective - and can also offer contributions above the monthly CPF wage cap to increase employee savings."


Employees in Singapore lack a well-defined default investment strategy. Less than 30% of the surveyed companies in Singapore currently offer their employees an investment choice in their retirement plans, and only 15% of retirement plans have a default investment fund. This leads to employees selecting their own optimal investment funds. They may lack experience in understanding investments, which can lead to misallocating their money and result in inadequate retirement savings or excessive risk taking.


Brittain added, "The key to protecting employees and adding value to savings in any defined contribution retirement plan is a well-defined default investment strategy. This includes frequent performance monitoring, actively managing investment risks and dynamically reducing investment risk as employees move towards retirement."


Notes to Editors

The Aon 2021 Trends in Retirement & Financial Wellbeing for Singapore survey was designed to help organisations understand the unique retirement and financial needs of their Singapore workforce. This tri-annual survey was completed by organisations with employee populations ranging from five to over 4,000 and are based in Singapore. Responding Rewards and Benefits Leaders, HR and Finance Professionals provided feedback and insight on their organisations' financial wellbeing and retirement programmes, interests and concerns. Click here for the full report.

About Aon

Aon plc (NYSE: AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

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Stay up to date by visiting the Aon Newsroom and hear from Aon's expert advisors in The One Brief.


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Food Prices push Inflation to 12.34% y/y in April 2020 - Brand Spur
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