SINGAPORE’S headline and core inflation in April maintained the same pace as in March, data from the Department of Statistics showed on Thursday (May 23), in line with economists’ expectations.
Official inflation forecasts remain unchanged, but the latest figures prompted some private-sector economists to lower their predictions for full-year headline inflation.
April’s headline inflation was 2.7 per cent, the same rate as in March and in line with the median forecast by private-sector economists polled by Bloomberg.
Private transport costs increased, but this was offset by lower accommodation inflation, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI).
Core inflation, which excludes accommodation and private transport, was 3.1 per cent – the same as in March, meeting economists’ median estimates.
On a month-on-month basis, the overall consumer price index (CPI) rose 0.1 per cent in April, while core CPI edged up 0.4 per cent.
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MAS and MTI maintained their full-year inflation forecasts, with both headline and core inflation expected to average between 2.5 and 3.5 per cent. Excluding the transitory effects of the goods and services tax hike, both headline and core inflation are expected to be between 1.5 and 2.5 per cent.
In contrast, UOB associate economist Jester Koh cut his full-year headline inflation forecast to 2.8 per cent, from 3 per cent previously. OCBC chief economist Selena Ling lowered hers to a range of between 2.8 and 3 per cent, from a range of 3 to 3.1 per cent previously.
This is given “well-behaved headline and core inflation prints for the year to date, and no indications that ongoing Middle East tensions have permanently contributed to higher energy prices”, she said.
In April, some broad CPI categories saw higher inflation, while others saw lower inflation.
Private transport costs increased by 0.3 per cent year on year, reversing from a 0.3 per cent fall the previous month, as car prices fell at a slower rate and petrol prices rose more steeply.
Accommodation inflation eased to 3.5 per cent, due to a smaller increase in housing rents and the cost of maintenance and repairs.
For core inflation components, electricity and gas inflation rose the most, reaching 7.6 per cent. This was on account of “larger increases in electricity and gas tariffs”, MTI and MAS said.
Retail and other goods inflation increased to 1.6 per cent due to a hike in water prices, a steeper increase in the prices of personal effects, and a smaller decline in the prices of clothing and footwear.
In contrast, services inflation eased to 3.5 per cent on the back of a larger decline in airfares and a more modest pace of increase in holiday expenses.
Food inflation also eased, to 2.8 per cent, due mainly to a smaller increase in the prices of non-cooked food and food services.
The “continued deceleration” in food inflation – to its lowest pace since early 2022 – is an “encouraging” sign, said DBS economist Chua Han Teng.
“Imported price pressures looked contained, amid manageable global food prices and the restraining effect from a strong Singapore dollar, while food services price increments also cooled,” he added.
