Singapore Consumer Prices Rise in March at Fastest Pace in Nearly a Decade

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By Ronnie Harui

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SINGAPORE–Singapore’s inflation in March was the highest in nearly a decade, mainly owing to higher costs for food and services.

The consumer price index for March rose 5.4% compared with the same period a year earlier, the Department of Statistics said Monday. The reading was the highest since April 2012, when the CPI rose 5.4%, and beat the median estimate for a 4.65% increase from a Wall Street Journal survey of 12 economists. Singapore’s CPI rose 4.3% on year in February.

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The cost of transportation, which has an index weighting of 17.07%, climbed 18.7% on year in March. Food prices, which have a 21.10% weighting, rose 3.3% on year, while housing and utilities costs, which make up 24.84% of the index, increased 4.4%, the data showed.

Core CPI, which strips out private road transport and accommodation costs, rose 2.9% in March from a year earlier, compared with February’s 2.2% increase. The median estimate of 11 economists in the WSJ survey was for a 2.4% rise in March.

External inflationary pressures have intensified amid sharp increases in global commodity prices and renewed supply chain disruptions driven by the Russia‐Ukraine conflict and the regional pandemic situation, the Monetary Authority of Singapore and the Ministry of Trade and Industry said in a joint statement Monday.

In the near term, heightened geopolitical risks and tight supply conditions will keep crude oil prices elevated, the MAS and MTI said. Supply‐demand mismatches in other commodity markets and bottlenecks in global transportation and regional supply chains are also likely to persist.

On the domestic front, the labor market is expected to remain tight and support a firm pace of wage increases over the year, the MAS and MTI said. Amid improving demand, greater pass‐through of business costs to consumer prices is likely to occur, keeping core inflation significantly above its historical average through the year.

Core inflation in Singapore is forecast to pick up further in coming months, before moderating toward the end of the year as some of the external inflationary pressures recede, the MAS and MTI said. However, there remain upside risks to inflation from the recent geopolitical and pandemic‐related shocks, they added.

For 2022, Singapore’s overall inflation is forecast between 4.5% and 5.5% while core inflation is projected to average 2.5%-3.5%, the MAS and MTI said.

Write to Ronnie Harui at [email protected]


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