Channel NewsAsia
Updated: 05/23/2013 13:31 | By Channel NewsAsia

Singapore's inflation slowed to 1.5% in April

Singapore's inflation slowed to 1.5% in April

Singapore's inflation slowed to 1.5% in April

SINGAPORE: Singapore inflation slowed to 1.5 per cent in April from 3.5 per cent in March, largely due to a big drop in certificate of entitlement (COE) premiums for cars.

April's year-on-year inflation was the lowest in more than three years since February 2010.

According to the Department of Statistics, private road transport cost, which include COE premiums for cars, edged up by 0.5 per cent in April.

This was a much smaller increase compared to the 8.6 per cent increase a month earlier.

The deceleration was due to lower COE premiums in April and price adjustments from car dealers after the government introduced financing restriction on motor vehicle loans in February.

As a result, the contribution of private road transport to Consumer Price Index (CPI)-All Items inflation fell to 0.1 percentage point from 1.2 percentage points in the preceding month.

Accommodation cost inflation also slowed to 2.4 per cent in April from 5.8 per cent in March due mostly to rebates for HDB service and conservancy charges.

On the whole, accommodation cost contributed 0.5 percentage point to CPI-All Items inflation, down from 1.2 percentage points in March.

Food inflation was stable at 1.8 per cent in April.

Core inflation, which excludes the costs of accommodation and private road transport, slowed to 1.4 per cent in April from 1.7 per cent in March. This was due to a smaller increase in services costs and a larger decline in the prices of oil-related items.

The Monetary Authority of Singapore (MAS) expects domestic cost pressures to persist in the light of continuing tightness in the labour market.

This will translate to a slight pick-up in prices of consumer services.

MAS said core inflation should rise moderately in the second half of the year and average 1.5 per cent to 2.5 per cent in 2013.

Overall inflation should also recede from its high in the first quarter due to mostly to lower COE premiums.

For 2013, MAS expects headline inflation to be between three per cent and four per cent in 2013.

- CNA/fa

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