Singapore's February inflation rises to 0.7% y-o-y, as expected

SINGAPORE'S February headline inflation crept higher to 0.7 per cent year-on-year - in line with market expectations.

But core inflation, which excludes the cost of accommodation and private road transport, eased to 1.2 per cent last month, compared to 1.5 per cent in the previous month, based on the latest inflation data released by the Department of Statistics on Thursday.

The 14 economists polled by Bloomberg had expected overall inflation to rise marginally to 0.7 per cent in February, from January's 0.6 per cent.

The slightly higher reading for headline inflation mainly reflected the larger increase in private road transport cost - which rose by 7.1 per cent. This is higher than the 4.1 per cent rise in the previous month due to the relatively low base in February last year.

The fall in core inflation mainly reflected lower services and food inflation. Services inflation slowed to 1.5 per cent in February from 1.9 per cent in January, mainly due to a fall in airfares and a more modest increase in holiday expenses.

Meanwhile, food inflation moderated to 1.3 per cent from 1.9 per cent, due to the smaller rise in non-cooked food prices after Chinese New Year and a high base last year.

Said the Monetary Authority of Singapore and the Ministry of Trade and Industry in joint comments: "The firmer rate of inflation in 2017 largely reflects the contribution of energy-related components, as well as some administrative price increases, rather than generalised demand-induced price pressures."