Economists polled by Bloomberg expected Singapore’s core inflation to keep climbing in February. It went the other way. Core inflation, which strips out accommodation and private transport costs, eased to 2.2 per cent year on year, down from 2.4 per cent in January, according to figures released on March 23, 2022. The forecast had been 2.6 per cent.
Services, food, and electricity and gas all rose more slowly. The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) published the data.
Where prices still jumped
Relief stopped at the core measure. Overall inflation rose to 4.3 per cent from 4 per cent, pushed up by private transport. Those costs climbed 17.2 per cent, against 14 per cent the month before, after Certificate of Entitlement premiums surged in February. Accommodation inflation edged up to 3.3 per cent from 3.1 per cent on bigger rent increases.
Elsewhere the pace slowed. Electricity and gas inflation fell to 16.7 per cent from 17.2 per cent. Food eased to 2.3 per cent from 2.6 per cent, and services fell to 2 per cent from 2.4 per cent, with telecommunication fees dropping more sharply and holiday costs rising less.
What MAS and MTI expect
In a joint statement, the two agencies said global inflation should stay high for some time before easing in the second half of the year. They warned of “upside risks to inflation from geopolitical and pandemic-related shocks.” Core inflation could reach 3 per cent by mid-year, they said, then ease as external inflation recedes. For 2022 as a whole they kept their forecasts unchanged: core inflation averaging 2 per cent to 3 per cent, and overall inflation between 2.5 per cent and 3.5 per cent.
Economists were looking ahead to MAS’s April review. The central bank had last tightened in a surprise off-cycle move in January, and analysts expected another round that would let the Singapore dollar appreciate further. OCBC chief economist Selena Ling put it this way: “MAS will tighten monetary policy at the upcoming April meeting, to combat elevated imported inflation, but it’s just a question of how potentially hawkish they may be.”
Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye said the Ukraine-Russia conflict, which intensified in March, was driving food and energy prices higher and disrupting commodity supplies. Their call: “Core inflation will likely jump in March.”
Sources
- Singapore's core inflation eases to 2.2%; global inflation expected to stay high: MAS and MTI
- Singapore core inflation eases in February but jump in car prices drive up overall inflation | The Straits Times
