Both core and overall inflation dipped from the previous month and came in well below analyst forecasts.
SINGAPORE - Singapore’s core inflation eased more than expected in March as prices of food and services rose at a slower place, with overall inflation dropping to a two-and-a-half-year low.
Overall inflation slowed year on year to 2.7 per cent, from 3.4 per cent in February. This is the lowest since September 2021. The slowdown was largely due to a decline in private transport costs, in addition to lower core inflation.Both inflation indicators came in well below market forecasts. Analysts polled by Bloomberg had tipped core inflation to come in at 3.5 per cent and overall inflation at 3.1 per cent.
“Core inflation has resumed its gradual downward trend after the blip during the festive Lunar New Year month. We expect core inflation to drift down towards 2.5 per cent by the fourth quarter, opening the door for MAS to ease policy at the October meeting,” the economist said.In March, private transport costs fell as car prices declined in tandem with lower premiums for certificate of entitlements . Anyone who wishes to register for a new vehicle in Singapore must first obtain a COE.
Accommodation inflation edged down due to a smaller increase in housing rents. Electricity and gas inflation eased as electricity costs rose at a more moderate pace. Core inflation is expected to stay on a gradual moderating trend over the rest of the year as import cost pressures continue to decline and tightness in the domestic labour market eases, they said.
The gradually strengthening Singapore-dollar trade-weighted exchange rate should also continue to temper Singapore’s imported inflation in the months ahead, they said.
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