Overall inflation up slightly to 0.5%
Smaller declines in private road transport and accommodation costs caused headline - or overall - inflation to go up slightly to 0.5 per cent year on year last month, compared with 0.4 per cent in the previous month, data released yesterday showed.
On the other hand, core inflation - which strips out private transport and accommodation costs - showed a different picture and came in a tad lower, at 1.5 per cent last month, down from 1.7 per cent in January.
Both indicators came in lower than expected, according to Bloomberg consensus forecasts from economists who were polled. They had expected headline inflation to come in at 0.6 per cent and core inflation at 1.7 per cent.
Despite the higher headline inflation figure, smaller price increases in electricity and gas, services and retail items led to an easing in core inflation, said the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) in a joint statement.
The February figures were released ahead of the MAS biannual monetary policy review due next month. The MAS had tightened its monetary policy twice last year but is expected to maintain its stance in the upcoming review, given the tame outlook for inflation.
Last month, the MTI and the MAS lowered the official full-year forecast for headline inflation to 0.5 per cent to 1.5 per cent, down from 1 per cent to 2 per cent previously. Core inflation was left unchanged.
The downgrade follows a predicted fall in global oil prices this year, with oversupply causing the sharp decline seen in the fourth quarter last year.
But there are signs of a recovery, with petrol and car prices falling at a slower pace last month. This led private road transport costs to ease by 2.3 per cent year on year last month, a smaller decline than the 3.4 per cent dip in the preceding month.
Accommodation costs fell by 1.6 per cent year on year last month, down from the 1.9 per cent decline in January. - THE STRAITS TIMES