Singapore Inflation Rate Hits 2 Year-High in May


Singapore's annual inflation rate edged up unexpectedly to a two year-high of 0.9 percent in May 2019 from 0.7 percent in the previous month and above market expectations of 0.7 percent. Both prices of food and transport rose faster, with cost of housing declining less.

Prices of food increased by 1.4 percent year-on-year in May, accelerating from a 1.3 percent gain in April. Among food excluding food servicing services, cost rose faster for fish & seafood (1.7 percent vs 1.1 percent); fruits (1.8 percent vs 1.4 percent); vegetables (3.1 percent vs 2.5 percent); and non-alcoholic beverages (1.8 percent vs 1.1 percent), with prices rebounding for milk, cheese & eggs (0.1 percentr vs -0.2 percent); oils & fats (1.7 percent vs -0.2 percent); and sugar, preserves & confectionery (0.8 percent vs -1.2 percent). Meantime, prices of bread & cereals went up at a slower rate (0.7 percent vs 2 percent), while those of meat declined (-0.3 percent vs a flat reading in April). Among food servicing services, prices increased faster for both restaurant food (1.7 percent vs 1.6 percent), and hawker food (1.5 percent vs 1.3 percent) while inflation was unchanged for both fast food (at 1.5 percent), and catered food (at 4.9 percent).

In addition, cost of transport rose 1.6 percent, compared to a 1.4 percent advance in a month earlier, in particular private road transport (1.5 percent vs 1.1 percent), amid higher car prices and a steeper rise in petrol prices. Also, cost increased faster for both recreation & culture (2.3 percent vs 2.1 percent), mainly due to holiday expenses (4.3 percent vs 4.1 percent); and health care (1.4 percent vs 1.2 percent), namely medical & dentral treatment (1.9 percent vs 1.8 percent); while inflation was unchanged for education (at 2.6 percent). In addition, cost of housing & utilities dropped at a softer rate (-0.7 percent vs -1 percent), with cost of accommodation falling less (-1 percent vs  1.4 percent) in the wake of the phased nationwide launch of the Open Electricity Market (OEM) on electricity prices. Meantime, inflation slowed for household durables & services (1.1 percent vs 1.4 percent), while cost of miscellaneous goods & services were flat for the second straight month in May. At the same time, cost fell further for both clothing & footwear (-1.3 percent vs -1.3), and communications (-0.5 percent vs -0.5 percent). 

Annual core inflation, which exclude costs of accommodation and private road transport, stood at 1.3 percent in May, unchanged from the prior month's one year-low.

For 2019, the country's central bank and trade ministry expect inflation to be in a range of 0.5-1.5 percent while core inflation is projected to come in near the mid-point of the 1-2 percent forecast range.

On a month-on-month basis, consumer prices rose 0.7 percent in May, the first monthly increase in three months, after a 0.3 percent decline in April.   

Singapore Inflation Rate Hits 2 Year-High in May


Statistics Singaporel Rida Husna | rida@tradingeconomics.com
6/24/2019 6:14:34 AM