Consumer price index rises 1.2% in March

SINGAPORE — Overall consumer prices gained at a stronger pace in March, rising by 1.2 per cent following a four-year low of 0.4 per cent in the preceding month, the latest Consumer Price Index (CPI) data provided by the Department of Statistics showed.

Last month’s headline inflation rate, which is in line with the 1.1 per cent projected by a Reuters’ poll, was lifted by strong gains in food and recreation costs, which rose 2.9 per cent and 2.5 per cent respectively, while health care costs grew 3.4 per cent and housing prices gained 1.2 per cent.

These combine to offset the 2.8 per cent drop in private road transport costs, as a result of a high base of Certificate of Entitlement (COE) premiums during the first quarter last year.

However, the pick-up in core-inflation rate — which excludes accommodation and private road transport costs — was more noticeable, rising by 2 per cent in March after February’s 1.6 per cent. This follows the latest exchange rate policy statement released by the Monetary Authority of Singapore (MAS) last week, which cautioned that inflationary pressure will persist throughout this year as manpower shortage translates to higher wage and business costs.

“Overall (economic) growth will be capped by supply-side constraints, particularly in the labour market... Wage pressures will persist and firms are likely to pass on business costs to consumer prices,” MAS said, maintaining its 2-3 per cent forecast for full-year core inflation.