(Bloomberg) — Singapore’s core inflation rate remained flat last month as lower energy and commodity prices offset higher services costs.
Core prices, which exclude personal transport and accommodation costs closely watched by the central bank, rose 3.1% year-on-year in May, holding steady at the level of the previous two months, the Monetary Authority of Singapore and the Ministry of Trade and Industry said in a statement on Monday, matching the median figure in a Bloomberg survey of economists.
All-item inflation rose to 3.1% after rising 2.7% in the previous month, driven by higher personal transport costs, the statement said. Month-on-month, the composite index rose 0.7%.
The Singapore dollar has recovered some of its losses in May after depreciating 2.29% against the US dollar in the first five months of the year, while global energy and food prices have remained relatively stable in recent months, helping to ease import inflation going forward.
The MAS, which has maintained a tighter policy stance over the past four meetings, is unlikely to change course given remaining risks including new geopolitical shocks, adverse weather conditions, and energy and food price shocks due to further transport disruptions.
Authorities left their average forecasts for core and headline inflation this year unchanged at 2.5% to 3.5%. In the MAS's latest quarterly survey in June, economists lowered their headline inflation forecast for this year to 2.8% from 3.1%, but kept their core outlook at 3%.
–With cooperation from Sato Tomoko.
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