Singapore inflation eases to 0.2% in March 2018
SINGAPORE: Singapore's headline inflation rate eased to 0.2 per cent in March from 0.5 per cent in February, mostly due to a smaller increase in the prices of services and a fall in private road transport cost.
Core inflation - which excludes the costs of accommodation and private road transport - eased to 1.5 per cent in March from 1.7 per cent the previous month, reflecting lower services inflation.
Data released by the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on Monday (Apr 23) showed that the cost of private road transport fell by 0.6 per cent in March, reversing the 0.6 per cent increase the previous month. This came as car prices fell following a decline in Certificate of Entitlement (COE) premiums, MAS and MTI said in a release.
Services inflation slowed to 1.4 per cent in March from 1.9 per cent in the previous month, mainly reflecting smaller year-ago increases in air fares and holiday expenses.
Food inflation dipped to 1.4 per cent in March from 1.5 per cent a month earlier due to a smaller increase in the prices of non-cooked food items and prepared meals.
The cost of accommodation fell by 3.4 per cent in March, moderating slightly from the 3.6 per cent decline in the preceding month, as the fall in housing rentals eased.
Economists polled by Reuters had expected headline inflation to increase 0.5 per cent and for core inflation to rise 1.7 per cent in March.
MAS and MTI said in the release that going forward, they expect imported inflation to "rise mildly" on the external front, as global demand strengthens amid ample supply in key commodity markets.
"Domestic sources of inflation are expected to increase alongside a faster pace of wage growth and pickup in domestic demand. However, the extent of consumer price increases will remain moderate, as retail rents stay relatively subdued and firms’ pricing power may be constrained by market competition," they added.
MAS core inflation is expected to rise gradually over the course of the year to come in at the upper half of the 1 to 2 per cent forecast range, should economic conditions evolve as expected, the release said.
Similarly, CPI-All Items inflation is projected to be in the upper half of the 0 to 1 per cent forecast range this year.