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Singapore headline inflation eases to 0.4% in April due to timing of S&CC rebates

Tuesday, May 23, 2017 - 13:05

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Singapore's April headline inflation eased to 0.4 per cent year on year, down from 0.7 per cent in March - coming in a tad below expectations.

SINGAPORE'S April headline inflation eased to 0.4 per cent year on year, down from 0.7 per cent in March - coming in a tad below expectations.

But core inflation, which strips out the cost of accommodation and private road transport, rose to 1.7 per cent year-on-year in April, up from 1.2 per cent in the previous month, based on the latest inflation data released by the Department of Statistics on Tuesday.

The 13 private sector economists polled by Bloomberg had expected overall inflation to come in at 0.5 per cent in April.

The fall in headline inflation mainly reflected the base effects associated with the timing of the service and conservancy charges (S&CC) rebates, which were disbursed to households in April 2017, but not in the same month last year. S&CC rebates were disbursed in May 2016.

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The higher reading for core inflation mainly reflected the stronger pickup in the cost of electricity and gas on the back of higher global oil prices.

Services inflation edged up to 1.7 per cent in April from 1.6 per cent in March, mainly due to higher telecommunication services fees, following price declines in the previous month.

Meanwhile, food inflation was stable at 1.3 per cent in April, as the rise in non-cooked food inflation was offset by the smaller increase in the prices of prepared meals.

Said the Monetary Authority of Singapore and the Ministry of Trade and Industry in joint comments: "Administrative price adjustments will also contribute to a temporary increase in inflation this year.

"Overall, domestic sources of inflation remain relatively muted. Conditions in the labour market have slackened, and this is expected to dampen underlying wage pressures, even as commercial and retail rents have continued to ease.

"The subdued economic environment will also limit the extent to which businesses pass on higher costs to consumers."

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