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

SINGAPORE - Singapore's key consumer price gauge rose five per cent in March, slightly lower than forecast, official data showed on Monday (April 24).

The core inflation rate - which excludes private road transport and accommodation costs - rose five per cent year-on-year in March, lower than the 5.5 per cent rise seen in February. A Reuters poll of economists had forecast a 5.1 per cent 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 per cent year-on-year in March, compared with a 5.6 per cent 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."

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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 per cent to 4.5 per cent, and headline inflation was forecast to come in higher at 5.5 per cent to 6.5 per cent this year.

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