Singapore’s core inflation eased to 4.7 percent year-on-year in May, official data showed on Friday (Jun 23).
Core inflation had risen to 5.5 percent in February and January this year, a 14-year high, before falling to 5 percent in March and April.
The decline in core inflation was mainly driven by falling inflation for services and food, said the Monetary Authority of Singapore and the Ministry of Trade and Industry (MTI).
Core inflation excludes accommodation and private transport costs. May’s figure of 4.7 percent matched a Reuters poll of economists.
Overall inflation fell to 5.1 percent on a year-on-year basis in May, down from 5.7 percent in the previous month. This largely reflected a fall in private transport inflation, in addition to lower core inflation.
Private transport inflation fell to 7.2 percent in May from 10.4 percent as car prices rose at a slower pace and the cost of petrol saw a sharper fall.
Food inflation eased to 6.8 percent in May from 7.1 percent in the previous month.
Services inflation fell from 4.3 percent in April to 3.9 percent in May, due to smaller increases in holiday expenses and point-to-point transport service costs.
Accommodation inflation also experienced – from 4.9 percent to 4.7 percent – as housing rents rose at a slower pace.
Similarly, inflation for retail and other goods moderated to 2.8 percent from April’s 2.9 percent as the pricing of clothing, footwear, and household durables recorded smaller increases.
Meanwhile, electricity and gas inflation rose to 3.3 percent from 2.7 percent due to a larger increase in electricity costs.
Core Inflation is expected to moderate further in the second half of the year as imported costs are reduced and the current tightness in the domestic labour market eases, they added.
At the same time, the increase in COE quota and supply of housing units available for rental, private transport, and accommodation inflation is expected to moderate over the course of the year.
For 2023 as a whole, the authorities project headline inflation to average between 5.5 percent to 6.5 percent and core inflation to average 3.5 percent to 4.5 percent.
