SINGAPORE consumer prices continued to climb in May, with headline inflation hitting 5.6 per cent, up from 5.4 per cent in April, according to the latest data on Thursday (Jun 23).

The consumer price index (CPI) reading now stands at its highest since late 2011, and beat the median forecast of 5.5 per cent in a private Bloomberg poll.

“The increase reflected stronger inflation across the broad categories of food, services, retail and other goods, as well as electricity and gas,” the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) said in a joint statement.

Separately, core inflation – which excludes private transport and accommodation costs – went up to 3.6 per cent in May, from 3.3 per cent in April.

Food prices were higher by 4.5 per cent year on year, with inflation picking up from the 4.1 per cent increase in April. Food services were up by 4.6 per cent, with hawker food now costing 4.8 per cent more, while food items grew by 4.5 per cent, led by fish and seafood (7.3 per cent), meat (7 per cent), oils and fats (6.7 per cent), and milk, cheese and eggs (6 per cent).

Services prices were up by 2.6 per cent in May, against 2.5 per cent in April, which was attributed to a faster rise in holiday expenses and point-to-point transport services.

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The cost of retail and other goods increased by 1.8 per cent, up from 1.6 per cent in April, on the back of clothing and footwear, personal effects, and personal care products expenses.

Meanwhile, electricity and gas prices grew by 19.9 per cent in May, compared with 19.7 per cent in April, as the MAS and MTI noted that “average prices of electricity plans offered by Open Electricity Market retailers rose at a faster pace”.

Private transport costs, which are not included in core inflation, grew by 18.5 per cent in May, against 18.3 per cent in April, as global oil prices drove up petrol costs. Similarly, accommodation costs were up by 4 per cent, more than the 3.9 per cent growth seen in April.

Still, the MAS and MTI reiterated the official forecast for full-year all-items inflation is between 4.5 per cent and 5.5 per cent, and core inflation of 2.5 per cent to 3.5 per cent.

Noting that the MAS did not indicate that its forecasts were under review, Barclays economist Brian Tan said in a note that the house base case is for the MAS to tighten monetary policy settings by increasing the slope of the Singapore dollar nominal effective exchange rate policy band at its next meeting in October.

While he noted that “the risk of an earlier-than-expected inter-meeting move is relatively high, in our view”, he added that the steeper slope and upward recentring of the policy band’s midpoint in April is likely to be seen by the MAS as “sufficiently aggressive to absorb slight upside surprises in inflation”.