SINGAPORE: Singapore’s core inflation remained at 3.1 per cent in April, unchanged from March.
An increase in electricity and gas and retail inflation was offset by slower price rises in services and food, according to data from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI).
On a month-on month basis, core inflation - which excludes accommodation and private transport - rose by 0.4 per cent in April, MAS and MTI said on Thursday (May 23).
Meanwhile consumer price index, or headline inflation, also remained unchanged at 2.7 per cent in April.
On a month-on-month basis, headline inflation increased by 0.1 per cent in April.
Electricity and gas inflation increased to 7.6 per cent in April from 4.8 per cent as costs rose on account of larger increases in electricity and gas tariffs.
Retail and other goods inflation increased to 1.6 per cent in April from 0.7 per cent in March.
MAS and MTI attributed the inflation increase to a hike in water prices, a steeper increase in the prices of personal effects and a smaller decline in the prices of clothing & footwear.
Services inflation slightly moderated to 3.5 per cent from 3.9 per cent "on the back of a larger decline in airfares and a more modest pace of increase in holiday expenses", said MAS and MTI.
Food inflation also eased to 2.8 per cent in April from 3.0 per cent in March, mainly due to the prices of non-cooked food and food services rising at a slower pace.
Private transport inflation increased to 0.3 per cent in April, after falling to -0.3 per cent in March, with the rise attributed to car prices falling at a slower rate and petrol prices increasing more steeply.
Accommodation inflation edged down further to 3.5 per cent from 3.7 per cent due to smaller increases in housing rents and the cost of housing maintenance and repairs, said MAS and MTI.
Core inflation is expected to "stay on a gradual moderating trend" over the rest of 2024, with a decrease visible in the fourth quarter of the year as import cost pressures continue to decline and tightness in the domestic labour market eases.
"Crude oil prices have been volatile in recent months but the global prices of most food commodities, as well as intermediate and final manufactured goods, have remained relatively stable or continued to decline.
In addition, inflation for services associated with overseas travel should moderate further over the course of the year as supply conditions in the air transport and hospitality sectors around the world improve," MAS and MTI said.
The authorities also expect private transport inflation to moderate from last year amid the larger projected COE supply in 2024.
"Accommodation inflation should also continue to ease as the supply of housing units available for rental increases over the course of the year," MAS and MTI added.
MAS and MTI projected both headline and core inflation to average to 2.5 to 3.5 per cent in 2024.
Excluding the transitory effects of the 1 per cent-point increase in the GST rate to 9 per cent, headline and core inflation are expected to come in at 1.5 to 2.5 per cent.
MAS and MTI, however, warned that risks to the inflation outlook remain as fresh geopolitical shocks and adverse weather events around the world could put upward pressure on global energy and food commodity prices, as well as shipping costs.
"Domestically, a stronger-than-expected labour market could also lead to a re-acceleration in wage growth.
"Conversely, an unexpected weakening in the global economy could induce a greater easing of cost and price pressures," MAS and MTI said.
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An increase in electricity and gas and retail inflation was offset by slower price rises in services and food, according to data from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI).
On a month-on month basis, core inflation - which excludes accommodation and private transport - rose by 0.4 per cent in April, MAS and MTI said on Thursday (May 23).
Meanwhile consumer price index, or headline inflation, also remained unchanged at 2.7 per cent in April.
On a month-on-month basis, headline inflation increased by 0.1 per cent in April.
Electricity and gas inflation increased to 7.6 per cent in April from 4.8 per cent as costs rose on account of larger increases in electricity and gas tariffs.
Retail and other goods inflation increased to 1.6 per cent in April from 0.7 per cent in March.
MAS and MTI attributed the inflation increase to a hike in water prices, a steeper increase in the prices of personal effects and a smaller decline in the prices of clothing & footwear.
Services inflation slightly moderated to 3.5 per cent from 3.9 per cent "on the back of a larger decline in airfares and a more modest pace of increase in holiday expenses", said MAS and MTI.
Food inflation also eased to 2.8 per cent in April from 3.0 per cent in March, mainly due to the prices of non-cooked food and food services rising at a slower pace.
Private transport inflation increased to 0.3 per cent in April, after falling to -0.3 per cent in March, with the rise attributed to car prices falling at a slower rate and petrol prices increasing more steeply.
Accommodation inflation edged down further to 3.5 per cent from 3.7 per cent due to smaller increases in housing rents and the cost of housing maintenance and repairs, said MAS and MTI.
OUTLOOK
Core inflation is expected to "stay on a gradual moderating trend" over the rest of 2024, with a decrease visible in the fourth quarter of the year as import cost pressures continue to decline and tightness in the domestic labour market eases.
"Crude oil prices have been volatile in recent months but the global prices of most food commodities, as well as intermediate and final manufactured goods, have remained relatively stable or continued to decline.
In addition, inflation for services associated with overseas travel should moderate further over the course of the year as supply conditions in the air transport and hospitality sectors around the world improve," MAS and MTI said.
The authorities also expect private transport inflation to moderate from last year amid the larger projected COE supply in 2024.
"Accommodation inflation should also continue to ease as the supply of housing units available for rental increases over the course of the year," MAS and MTI added.
MAS and MTI projected both headline and core inflation to average to 2.5 to 3.5 per cent in 2024.
Excluding the transitory effects of the 1 per cent-point increase in the GST rate to 9 per cent, headline and core inflation are expected to come in at 1.5 to 2.5 per cent.
MAS and MTI, however, warned that risks to the inflation outlook remain as fresh geopolitical shocks and adverse weather events around the world could put upward pressure on global energy and food commodity prices, as well as shipping costs.
"Domestically, a stronger-than-expected labour market could also lead to a re-acceleration in wage growth.
"Conversely, an unexpected weakening in the global economy could induce a greater easing of cost and price pressures," MAS and MTI said.
Continue reading...