Singapore’s core inflation rose to 3.6% in February, the highest since July 2023, due to increased costs in healthcare and recreation goods and services, official data revealed on Monday.
Exceeding expectations and a Reuters poll forecast of 3.4%, this surge in core inflation excludes private road transport and accommodation costs. The rates saw a notable increase from January’s 3.1%.
While headline consumer prices also rose by 3.4% year-on-year in February, surpassing both the forecast and the previous month’s figures, the Ministry of Trade and Monetary Authority of Singapore attributed this spike to higher services and food inflation, partly linked to the Chinese New Year season.
Looking ahead, the Trade Ministry and MAS expect core inflation to gradually decline throughout the year, citing decreased import cost pressures and easing tightness in the domestic labor market. Projected average inflation rates for 2024 range between 2.5% to 3.5%.
Despite a slowdown in inflation compared to the previous year, Singapore continues to face persistent inflation amidst slower economic growth and a recent one-percentage point increase in goods and service tax. The economy expanded by 1.1% in 2023, down from 3.8% in 2022.
In response to the economic conditions, MAS kept monetary policy settings unchanged in January and anticipates revisiting these settings in April, given the increased frequency of reviews to quarterly assessments starting this year. Monetary tools, particularly the exchange rate, will continue to be utilized to manage the inflation outlook.
