Chart of the Day: You won't believe how low inflation can get by year-end

It rose only 0.4% in February.

According to OCBC, inflation retreated faster than expected in Feb, rising by only 0.4% yoy (slowest since Jan 2010) and a sharp pullback from the 1.4% yoy seen in Jan, as private road transport costs fell a significant 7.1% yoy (due to high base effects) and the dip in petrol pump prices.

In on-month terms, headline CPI fell 0.1% on a non-seasonally adjusted basis, and marking the second mom drop in three months.

Here's more from OCBC:

This also contrasted with our forecast for +0.8% yoy (+0.2% mom) in Feb, and the Bloomberg consensus forecast of +0.9% yoy (+0.2% mom nsa).

MAS core inflation also subsided from 2.2% in Jan to 1.6% in Feb, attributed to less costly food and services.

While MAS expects overall imported inflation to remain subdued, domestic costs could pass through more significantly to consumer services, as firms face rising costs from labour.

This is already apparent for tuition & fees (+3.4% yoy), healthcare costs (+4.0% yoy) and recreation & entertainment (+2.9% yoy) in Feb.

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