Singapore’s inflation remained unchanged at five percent in March, similar to the five percent increase in consumer prices in February.
According to the Department of Statistics, the consumer price index (CPI) increased five percent year-on-year in March, primarily due to higher housing, food and transport costs.
The transport cost grew by 13.4 percent, attributed to higher prices of petrol and cars, while higher electricity tariffs and accommodation costs increased housing costs by 7.1 percent. Meanwhile, food prices rose 2.6 percent, especially for vegetables, seafood, rice, meat, and prepared meals.
In a research note released yesterday, Citigroup concluded that inflation will moderate for the rest of the year.
“Headline year-on-year inflation will likely average four percent to 4.5 percent in Q2, but remain high at around three percent by year-end owing to the delayed pass through of pipeline inflation pressures as well as the expiration of deferred price hikes such as public transport fares,” said Kit Wei Zheng, a Citigroup economist.
Excluding accommodation costs, the CPI was 4.2 percent higher in March compared to the same month in 2010. In Q1 this year, the CPI grew by 5.2 percent compared to the same period last year.
Meanwhile, core inflation, excluding private transport and accommodation costs, increased 1.8 percent in March compared to the previous year.
The CPI climbed 0.1 percent month-on-month, as the higher costs of items such as housing, clothing and footwear were partly offset by lower transport costs. On a seasonally adjusted basis, it rose 0.3 percent in March against February.
Leif Eskesen, HSBC Chief Economist (India and Asean), believes that inflation is expected to stay on the high side for a while, due to factors such as instability in the Middle East, higher wages and increasing food prices.
“There is likely to be somewhat softer readings on economic activity over the next few months due to elevated oil prices and the spillovers from the tragic events in Japan, but that will not suffice to bring about slack in the economy.”