Singapore March core inflation rises 5%, slightly less than forecast

SINGAPORE  – Singapore’s key consumer price gauge rose 5 percent in March, slightly lower than forecast, official data showed on Monday.

The core inflation rate – which excludes private road transport and accommodation costs – rose 5 percent year-on-year in March, lower than the 5.5- percent rise seen in February. A Reuters poll of economists had forecast a 5.1- percent increase in March.

The rate was driven by lower inflation for services, food, retail and other goods, according to a joint statement by the Monetary Authority of Singapore (MAS) and the trade ministry.

Headline inflation was up 5.5 percent year-on-year in March, compared with a 5.6- percent increase seen in a Reuters poll.

Lee Ju Ye, an economist at Maybank Investment Banking Group, said the slowing was much about last year’s high base from the conflict in Ukraine and its impact on food and energy prices.

“Accommodation costs seem to be peaking…while food and private transport costs will likely continue to ease from last year’s,” she said.

“We expect both headline and core inflation to gradually ease and do not expect MAS to further move in October.”

The MAS left its monetary policy settings unchanged in its review earlier this month, reflecting the concerns about its growth outlook and surprising economists, who had expected another round of tightening on elevated inflation.

It has also said core inflation will remain elevated in the next few months but should progressively ease in the second half of 2023 and end the year significantly lower.

The central bank said core inflation was expected to average 3.5 percent to 4.5 percent , and headline inflation was forecast to come in higher at 5.5 percent to 6.5 percent this year.

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