Singaporean headline and core inflation slowdown in March

Singapore’s headline and core inflation came in below market projections in March. The headline consumer price inflation decelerated to 0.2 percent year-on-year in March from February’s 0.5 percent, while core inflation unexpectedly eased to 1.5 percent year-on-year from 1.7 percent earlier.

Even as the fall in prices of housing, utilities and transport had been expected, the surprise came from the 0.2 percent sequentially contraction in food prices and bigger monthly falls in air fares, holiday expenses and communications. This led to the headline inflation and core rate to drop 0.2 percent sequentially in March, noted ANZ in a research report.

The Monetary Authority of Singapore had recently upgraded its inflation projection at their April Monetary Policy Statement, projecting both headline and core inflation to be in the upper half of their forecast ranges. The central bank has maintained its forecast after the release of today’s inflation data. At this stage, the inflation figures for April also look likely to be on the weak side.

It will need a much stronger recovery in employment and wages in order to push inflation towards the upper range as MAZ expects and also for them to tighten policy again in October, stated ANZ.

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