Singapore’s headline inflation continued its contraction for the 18th consecutive month in April, declining 0.5% from a year ago.
Economists polled by Bloomberg had put the expected fall at 0.7%. It was also smaller than the 1% drop recorded in March.
In a joint release on Monday, the Monetary Authority of Singapore and the ministry of trade and industry said April’s drop in headline inflation was due to the “low base associated with the disbursement of service & conservancy charges rebates in April last year”.
MAS core inflation, which excludes the costs of accommodation and private road transport, however, surprised the market and hit a 13-month high of 0.8% last month due to higher services inflation as well as a smaller decline in electricity tariffs.
Even though MAS still kept its inflation forecasts in Monday’s release, it focused “reduced labor market tightness” as an additional factor that will depress prices for this year.
MAS sees core inflation forecast to be in the lower half of 0.5-1.5% range, and headline inflation to remain negative, and average -1 to 0% for the whole year.
Fall in accommodation costs in April eased to 0.9%, as compared to 3.2% in March.
Weaker certificate of entitlement premiums and petrol prices pulled down private transport costs, which fell a deeper 7.1% as compared to 5.9% a month earlier.
Cost of electricity, liquefied petroleum gas, and gas fell by a more moderate 13.9%. It was at a 14.9% decline in March.
Food prices inched up by 2.3% from 2.2% in March as prices of non-cooked food items increased.
