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.
That was higher than the 4.7 per cent forecast in a Bloomberg survey of economists. It is still lower than the 5.5 per cent core inflation recorded in February, which is the highest since November 2008.
April’s core inflation rise came as lower price increases in electricity and gas, food, retail and other goods were offset by higher inflation for travel-related services.
The headline consumer price index, or overall inflation, rose to 5.7 per cent in April on higher inflation for services and private transport, after easing to 5.5 per cent in March. This was higher than the 5.5 per cent prediction in the Bloomberg poll.
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.
Electricity and gas inflation recorded the steepest decline in April. Their prices rose by 2.7 per cent, much lower than their 12.2 per cent surge in March. This was due to smaller increases in both electricity costs and the gas tariff.
Food inflation dropped to 7.1 per cent in April on the back of slower price hikes in non-cooked food and prepared meals, while inflation for retail and other goods eased to 2.9 per cent as prices rose at a slower pace.
Private transport inflation went up the most, jumping 10.4 per cent in April from 8.6 per cent in March, as car prices rose more steeply.
Also on the upward trend was services inflation, which rose to 4.3 per cent in April given the pick-up in airfares and a faster pace of increase in holiday expenses.
Accommodation inflation edged up a notch to 4.9 per cent as a smaller increase in housing rentals was more than offset by a larger rise in the cost of housing maintenance and repairs.