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Singapore core inflation stays firm at 5% in April

SINGAPORE - After easing in March, core inflation was unchanged in April, held up by pricier holiday expenses and airfares.

Core consumer prices – which exclude private transport and accommodation costs, and thus reflect the expenses of Singapore households more accurately – rose 5 per cent in April, unchanged from March but still lower than the 5.5 per cent recorded in February, a figure that is the highest since November 2008.

The April figure came on the back of lower price increases in electricity and gas, food, retail and other goods, which were offset by higher inflation for travel-related services.

But the headline consumer price index, or overall inflation, bucked the downward trend to rise 5.7 per cent in April, up from 5.5 per cent in March.

This was higher than Bloomberg’s poll of 5.5 per cent and was led by higher inflation for services and private transport.

The official projections for the year remain unchanged at between 5.5 per cent and 6.5 per cent for headline inflation, and between 3.5 per cent and 4.5 per cent for core inflation. These estimates take into account the goods and services tax hike from 7 per cent to 8 per cent from Jan 1.

The Monetary Authority of Singapore and Ministry of Trade and Industry on Tuesday said that upside risks remain, including from fresh shocks to global commodity prices and more persistent-than-expected tightness in the domestic labour market.

They added that there are also downside risks such as a sharper-than-projected downturn in the advanced economies that could induce a general easing of inflationary pressures.