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Singapore's April CPI increase seen steady at 0.7% y/y

The Edge logo The Edge 6 days ago Reuters
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SINGAPORE (May 19): Singapore's consumer price index probably rose 0.7% in April from a year earlier, same as the previous month's pace, a Reuters poll showed.

The poll also showed that the Monetary Authority of Singapore's (MAS) core inflation measure likely increased 1.3% from a year earlier in April, compared with 1.2% in March month.

The main driver for higher core inflation was a rise in electricity tariffs, Credit Suisse economist Michael Wan said.

"Besides that, most of the factors were a continuation from the previous month's trend," he said.

"I don't think we are going to get very big surprises on the inflation side," said Selena Ling, head of treasury research and strategy at OCBC Bank.

"A lot of the administrative price hikes, like the water price hike haven't really kicked in and would only probably kick in third quarter onwards."

The government in February announced a two-step, 30% increase in water prices, the first water prices increase in nearly two decades.

On the whole, the CPI numbers aren't likely to shift the central bank's neutral policy stance.

The MAS held policy steady in April, saying a "neutral" stance will be needed for an extended period as it looked to support an economy that contracted in the first quarter amid lingering risks to the global outlook.

The central bank's core inflation measure excludes changes in the price of cars and accommodation, which are influenced more by government policies.

 

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