Singapore’s core inflation rate held steady in April, a trend the city-state’s central bank said signals the path for moderating price gains.
(Bloomberg) — Singapore’s core inflation rate held steady in April, a trend the city-state’s central bank said signals the path for moderating price gains.
The core measure, which excludes housing and private transportation costs and is watched by the central bank to determine policy settings, rose 5% from a year earlier, official data showed Tuesday. While that was faster than the 4.7% gain forecast by economists in a Bloomberg survey, it matched the pace of increase in March.
The Monetary Authority of Singapore, in a joint statement with the Ministry of Trade and Industry, said that the increase was on account for businesses passing on higher labor costs to consumers.
That will keep the key core inflation rate “elevated in the next few months,” according to the statement. “Nonetheless, it will remain on a broad moderating path.”
The all-items inflation came in at 5.7% from a year earlier, higher than the 5.5% expected by economists.
The MAS, which uses the exchange rate as its main policy tool, last month joined a growing list of central banks that have opted to keep policy settings unchanged amid global growth risks. The latest price print is unlikely to alter the authority’s stance, which already factors in core inflation staying elevated for the next few months.
The MAS reiterated its expectation for the measure of underlying price pressures to slow more discernibly in the second-half of the year as imported inflation falls further and the current tightness in the domestic labor market eases.
What Bloomberg Economics Says…
“As the global economy slows more sharply in the months ahead, demand-pull pressures should start to ease and stem spillovers from accumulated cost increases.”
—- Tamara Mast Henderson, Asean economist
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Both the MAS and MTI also reiterated projections for 2023 headline and core inflation, seeing ranges of 5.5%–6.5% and 3.5%–4.5%, respectively.
Other details from Tuesday’s print:
- Increase in health care inflation was highest since June 2013 while uptick in recreation was most in four decades, according to data
- Food prices rose 7.1% from year ago
- Housing and utilities increased 4.5% year-on-year
–With assistance from Tomoko Sato.
(Updates with MAS comments throughout.)
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