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SINGAPORE'S headline inflation in May strengthened to 1.4 per cent year-on-year due to the absence of rebates, while core inflation fell slightly to 1.6 per cent.
May's headline inflation of 1.4 per cent was up from April's 0.4 per cent, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry in a Friday joint release.
This was due to the base effects related to the disbursement of government rebates on service and conservancy charges, which lowered the costs of housing maintenance and repairs. For 2016, they were disbursed in May, but this year they were issued in April.
Core inflation, which excludes accommodation and private road transportation costs, eased to 1.6 per cent in May from April's 1.7 per cent. This indicator is a key consideration for MAS' monetary policy moves.
This was due to the fall in services inflation, which more than offset the pickup in food as well as electricity and gas inflation, said the release.
For 2017, core inflation is expected to average one to 2 per cent, compared with 0.9 per cent in 2016, while headline inflation is projected to rise to 0.5 to 1.5 per cent from -0.5 per cent last year.
"The projected pickup in inflation can be attributed to the positive contribution of energy-related components and the impact of administrative price increases, rather than generalised demand-induced price pressures," said the release.