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Singapore Inflation Rises More Than Expected

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Singapore consumer prices and core inflation increased more than expected in March, data published by the Monetary Authority of Singapore and the Ministry of Trade and Industry showed on Monday.

Consumer prices increased 5.4 percent year-on-year in March, following a 4.3 percent rise in February. Economists had expected the inflation rate to rise moderately to 4.7 percent.

The latest increase in inflation was due to higher food prices, private transport and accommodation inflation.

MAS core inflation rose to 2.9 percent in March from 2.2 percent in the previous month. Economists had forecast a rise of 2.4 percent.

The higher core inflation was largely driven by higher inflation for food and services.

On a monthly basis, consumer prices grew 1.2 percent in March and the core CPI rose 0.7 percent.

External inflationary pressures have increased amid sharp rise in global commodity prices and renewed supply chain disruptions due to both the Russia-Ukraine conflict and the regional pandemic situation.

Core inflation is forecast to increase further in the months ahead before easing towards the end of the year as external inflationary pressures recede.

For 2022 as a whole, overall inflation is forecast to come within 4.5-5.5 percent, while MAS core inflation is projected to average 2.5-3.5 percent.

With price pressures expected to persist in the near term, the central bank is likely to retain its hawkish bias even after the string of rate increases carried out over the past few months, Nicholas Mapa, an ING economist, said.

Surging core inflation will likely keep MAS on its toes but a slowing global economy complicates the decision-making process in 2022, the economist added.

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