Singapore inflation hits decade highs in March as consumer prices surge by 5.4%

SINGAPORE’S headline inflation jumped to 5.4 per cent in March – a high not seen since April 2012 – as the cost of food, services, private transport and accommodation all rose.

The all-items consumer price index (CPI) reading picked up strongly from 4.3 per cent in February, and came in well ahead of the median forecast of 4.7 per cent in a Bloomberg poll.

Core inflation, which excludes accommodation and private transport costs, was up to 2.9 per cent, from 2.2 per cent in February. Core inflation last touched 2.9 per cent in March 2012.

“With private transport and accommodation inflation expected to stay firm in the near term, headline inflation will pick up by more than core inflation this year,” the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) said jointly on Monday (Apr 25).

The authorities also reiterated that core inflation should moderate towards the year-end as some external pressures recede, but warned that “there remain upside risks to inflation from the recent geopolitical and pandemic‐related shocks”.

That’s as the MAS and MTI reported that “external inflationary pressures have intensified” as the two-month-long war in Ukraine and a regional pandemic situation have driven up global commodity prices and continued to disrupt supply chain disruptions.

As domestic demand improves, “greater pass‐through of accumulating business costs to consumer prices is likely to occur, keeping core inflation significantly above its historical average through the year,” they also noted.

The latest print came less than a fortnight after the MAS hiked its full-year forecasts on Apr 14 to between 4.5 per cent and 5.5 per cent for all-items prices, and 2.5 per cent to 3.5 per cent for core. The MAS also tightened Singapore’s monetary policy settings at the time, to slow inflation.

March’s CPI increased as private transport inflation spiked to 21.5 per cent, from 17.2 per cent in February, on higher car and petrol prices, and accommodation costs were higher by 3.5 per cent, against 3.3 per cent before, on the increase in rents.

Electricity and gas costs surged by 17.8 per cent in March, up from 16.7 per cent in February, on the back of higher global oil prices.

Food prices were up by 3.3 per cent in March, compared with 2.3 per cent in February, which the MAS and MTI attributed to prices of both non-cooked food and food services.

Separate data from the Department of Statistics showed hikes in the costs of staples such as oils and fats (6.2 per cent), fish and seafood (5.2 per cent), vegetables (4.6 per cent), milk, cheese and eggs (3.8 per cent) and meat (3.5 per cent).

As for food services, hawker food clocked the biggest increase (3.5 per cent), compared with restaurants (2.9 per cent), fast food joints (2.2 per cent) and caterers (1.2 per cent).

Meanwhile, services expenses grew by 2.6 per cent in March, from 2 per cent in February.

“Services inflation was higher primarily due to a larger increase in the cost of other transport services and holiday expenses,” the MAS and MTI said.

“At the same time, the costs of recreational and cultural services and point‐to‐point transport services also picked up more strongly.”

Prices of retail and other goods were higher by 0.4 per cent in March, double the 0.2 per cent uptick in February, on higher prices for telecom gear, personal care products, recreational and cultural goods, and alcoholic drinks and tobacco.