Singapore's core inflation dips to 0.6% in May as food prices ease
April's core inflation figure of 0.7 per cent had marked the first year-on-year increase after six months.
On a month-on-month basis, core inflation – which excludes accommodation and private transport – eased to 0.0 per cent in May.
Overall inflation dipped to 0.8 per cent, down from 0.9 per cent in April, due to lower private transport inflation.
On a month-on-month basis, overall inflation – which excludes non-consumption expenditures such as purchases of houses, shares and other financial assets and income taxes – rose 0.7 per cent, said MAS and MTI.
SECTORS
Food inflation decreased from 1.4 per cent in April to 1.1 per cent in May as the prices of non-cooked food moderated.
Private transport costs fell at a slower pace from 1.3 per cent to 1.1 per cent due to a smaller increase in car prices.
Electricity and gas inflation slowed further from -3.5 per cent to -3.7 per cent on the back of a larger decline in electricity prices.
Retail and other goods inflation fell at a slower pace from -1.2 per cent to -1.0 per cent due to a rise in the prices of household appliances and a smaller decline in the cost of personal effects.
Services inflation remained unchanged at 1.1 per cent, as the larger increase in the costs of point-to-point transport services and health insurance offset a steeper decline in holiday expenses.
It was the same for accommodation inflation, which held at 1.1 per cent, on account of a smaller increase in housing rents being negated by a larger increase in the cost of housing maintenance and repairs.
OUTLOOK
MAS and MTI said that Singapore's imported inflation is expected to remain "moderate", noting that while global crude oil prices have risen in recent weeks, they are currently still close to the average in 2024.
"Food commodity price increases should also stay contained," they added.
"Although the trade conflicts and the increase in global energy prices could be inflationary for some economies, their impact on Singapore's import prices is likely to be offset by the disinflationary drags exerted by weaker global demand."
Domestically, unit labour costs are projected to rise gradually alongside moderating nominal wage growth and improving productivity.
"At the same time, enhanced government subsidies for essential services such as public healthcare, pre-school education and public transport will continue to dampen services inflation," said MAS and MTI.
Taking these factors into account, core inflation and overall inflation are projected to average between 0.5 per cent and 1.5 per cent this year.
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