Singapore's core inflation remains at 1.3% in May

Singapore's core inflation remains at 1.3% in May

SINGAPORE: Singapore's core inflation rate in May remained unchanged from the previous month, as retail and food inflation broadly offset a steeper decline in the cost of electricity and gas.

Core inflation - which excludes the costs of accommodation and private road transport - came in at 1.3 per cent year-on-year in May, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) in a press release on Monday (Jun 24).

However, Consumer Price Index (CPI)-All Items inflation rose to 0.9 per cent year-on-year in May, up from 0.8 per cent in April. 

This was driven by a more modest decline in accommodation costs as well as higher private road transport, retail and food inflation, which outweighed a larger fall in electricity and gas costs, said MAS and MTI.

The cost of private road transport rose by 1.5 per cent year-on-year in May, higher than the 1.1 per cent increase in the previous month. 

This was mainly driven by a steeper rise in car prices, which more than offset a smaller increase in petrol prices.

Services inflation came in at 2 per cent year-on-year in May - unchanged from the previous month.

This was mainly due to a stronger pickup in holiday expenses being offset by a larger decline in the cost of telecommunication services fees, as well as smaller increases in airfares and recreational and cultural services fees.

The cost of electricity and gas fell by 4 per cent on a year-on-year basis - a steeper decline than the 2.8% drop in April - due to the dampening effect of the phased nationwide launch of the Open Electricity Market (OEM) on electricity prices, said MAS and MTI.

Meanwhile, the overall cost of retail items edged up by 0.5 per cent year-on-year in May, compared to the 0.2 per cent rise in April.

Accommodation costs fell at a more moderate pace of 1.0 per cent in May, compared to the 1.4 per cent drop in the previous month, while food inflation rose slightly to 1.4 per cent year-on-year in May, higher than the 1.3 per cent in April.

External sources of inflation are "likely to be benign" for the rest of 2019, said MAS and MTI.

The authorities expect core inflation to come in near the mid-point of the forecast range of 1 per cent to 2 per cent.

Private road transport costs could pick up slightly in 2019 compared to last year, while accommodation costs are likely to decline at a slower pace this year, they added.

Source: CNA/ic(hs)

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