SINGAPORE’S core consumer prices have continued to climb on increases in the cost of food and other goods, as well as electricity and gas, according to figures out on Monday (May 23).

Core inflation – which excludes accommodation and private transport costs – jumped to 3.3 per cent in April, up from 2.9 per cent in March. This is its highest level since early 2012.

That’s even as the headline inflation print was stable on the month before at 5.4 per cent – and a shade under the median estimate of 5.6 per cent in a Bloomberg poll – as the growth in private transport costs eased on a smaller increase in car prices.

“This is likely because car Certificate of Entitlement (COE) premiums had surged in April 2021 – implying a base effect – but fell slightly on average in April 2022,” suggested Barclays economists Brian Tan and Shreya Sodhani.

Still, private transport expenses were up by 18.3 per cent in April, against 21.5 per cent in March, while accommodation costs rose by 3.9 per cent year on year in April, compared with 3.5 per cent in March, on higher rents.

Private transport and accommodation inflation are expected to stay firm in the near term, according to projections from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI).

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Added Maybank economists Chua Hak Bin and Lee Ju Ye in a note: “We expect the private transport category to remain elevated as fuel pump prices climbed to a new high in May, despite global oil prices falling by around 15 per cent lower from their peaks in March.”

The rising price of food continued to drive inflation in April, with costs higher by 4.1 per cent year on year, up from 3.3 per cent in March.

The MAS and MTI noted that “the prices of both non-cooked food and food services rose at a faster pace”. The price of oils and fats was up by 9.9 per cent in April; milk, cheese and eggs by 6.7 per cent; meat by 5.7 per cent; and fish and seafood by 5.6 per cent.

Hawker fare was up by 4.2 per cent, and restaurant food, by 3.8 per cent, which Lee and Chua noted is “reflecting higher pass-through to consumers”.

Inflation in retail and other goods picked up to 1.6 per cent, from 0.4 per cent in March – attributed to an increase in apparel prices. Clothes cost 1.7 per cent more year on year.

Electricity and gas prices grew by a steeper 19.7 per cent in April, compared with 17.8 per cent in March, as household electricity and gas tariffs went up in the second quarter. Meanwhile, services inflation was 2.5 per cent in April, against 2.6 per cent in March, which was attributed to the relaxation of Covid-19 test requirements for travel.

Nicholas Mapa, senior economist at ING, said: “Supply chain challenges, slowing global trade and elevated commodity prices all filtered through to Singapore inflation readings.

“Improving demand dynamics may have also contributed to inflationary pressures, with March retail sales blowing past expectations. With supply chain issues not likely to abate any time soon, we expect price pressures to persist going into the second half of the year.”

The MAS and MTI reiterated in their latest joint statement that core inflation will be “significantly above its historical average through the year” and could continue to rise “in the coming months” before retreating towards the year-end.

Meanwhile, Prime Minister Lee Hsien Loong recently told Japanese media outlet Nikkei that, even as central bankers worldwide work to tackle rising inflation, “there is a considerable risk of doing what you need to do but as a result, provoking a recession”.

The official forecast is for core inflation of between 2.5 per cent and 3.5 per cent in 2022, and for headline inflation of between 4.5 per cent and 5.5 per cent.