Inflation hit 40-month high at 0.5% in February

Prices of food and accommodation rose within the month.

Singapore’s CPI-All Items inflation rose 0.5%, whilst MAS core inflation rose 1.7% in February. According to the Ministry of Trade and Industry (MTI), higher inflation reflected higher services and food inflation, and in the case of CPI-All Items inflation, a smaller decline in the cost of accommodation as well.

CPI-All Items inflation reached 0.5%, because of “a milder decline in the cost of accommodation, and to a lesser extent, a stronger pickup in the prices of services and food, which, collectively, more than offset the decline in private road transport inflation. The cost of accommodation fell by 3.6% in February, moderating from the 5.3% decline in the preceding month, as the dampening effect of the disbursement of Service & Conservancy Charges (S&CC) rebates in January dissipated,” MTI said.

The ministry added that services inflation jumped to 1.9% in February from 1.3% in January, as a rise in air fares and holiday expenses, following the year-ago declines in the previous month, more than offset the smaller increase in recreational & cultural services fees. Food inflation also rose to 1.5% in February from 1.1% in the previous month, reflecting a larger increase in the prices of non-cooked food items, and to a lesser extent, the cost of prepared meals, due to the seasonal uptick in food prices associated with Chinese New Year.

Meanwhile, private road transport inflation slowed to 0.6% in February from 1.6% in January, largely due to a smaller year-ago increase in petrol prices, as well as lower Electronic Road Pricing (ERP) charges.

MTI noted that inflation, as measured by CPI less imputed rentals on owner-occupied accommodation (OOA), was 1.5% in February, up from 1.0% in the previous month. “Apart from higher services and food inflation, this was also due to the increase in the cost of housing maintenance & repairs, as the negative contribution of the S&CC rebates to year-ago inflation dissipated in February,” the ministry said.

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