Singapore's Core Inflation Eases To 1-year Low In April

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SINGAPORE: Singapore's core inflation eased to a one-year low in April, due mainly to a drop in the cost of electricity and gas as well as lower food inflation.

Core inflation - which excludes the costs of accommodation and private road transport - came in at 1.3 per cent year-on-year in April, easing from 1.4 per cent the previous month, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) in a press release on Thursday (May 23).

This is the lowest level since April last year, when core inflation was also at 1.3 per cent.

Despite lower core inflation, Consumer Price Index (CPI)-All Items inflation rose to 0.8 per cent year-on-year in April from 0.6 per cent the previous month, due to a pick-up in private road transport costs, said MAS and MTI.

The figures for both inflation measures are in line with a Reuters poll earlier this week.

Private road transport costs rose by 1.1 per cent year-on-year in April, reversing the 0.9 per cent decline in March. This was mainly driven by higher car prices as well as a stronger pick-up in petrol prices, said MAS and MTI.

Services inflation came in at 2 per cent year-on-year in April, higher than the 1.7 per cent recorded in the previous month.

This was mainly due to larger increases in holiday expenses, domestic services fees and recreational and cultural services fees, which outweighed the smaller increase in healthcare services fees. 

A rise in air fares also contributed to the pick-up in services inflation.

The cost of electricity and gas fell by 2.8 per cent on a year-on-year basis, reversing the 3.9 per cent increase in the previous month.

This was mainly due to lower electricity tariffs and the dampening effect of the phased nationwide launch of the Open Electricity Market on electricity prices, said MAS and MTI.

Meanwhile, the overall cost of retail items edged up by 0.2 per cent year-on-year in April, slightly higher than the 0.1 per cent increase in March. 

Accommodation costs fell by 1.4 per cent year-on-year in April, the same pace of decline as in March.

Food inflation eased to 1.3  per cent year-on-year in April, from 1.6 per cent in March.

OUTLOOK FOR REST OF 2019

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 to 2 per cent in 2019.

Private road transport costs are projected to be largely unchanged from 2018, while accommodation costs are likely to decline at a slower pace this year, they added.