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Singapore Inflation March 2021

Singapore: Inflation hits highest level in nearly four years in March

Consumer prices increased 0.22% over the previous month in March, moderating from the 0.57% increase recorded in February. March’s lower reading was principally driven by falling food and beverage prices.

Inflation rose to 1.3% in March from February’s 0.7%, thus marking the highest inflation rate since May 2017. As a result, the annual average variation of consumer prices edged up to minus 0.1% in March (February: -0.2%), while core inflation came in at 0.5% in March from February’s 0.2% increase.

Commenting on the outlook for inflation in 2021, Barnabas Gan, economist at United Overseas Bank, sees higher albeit restrained inflationary pressures ahead:

“The balance of risk for inflation in 2021 is tilted to the upside on the back of the reflation environment–defined as the return to global economic growth after the Covid-19-induced recession in 2020. On the flip side, the uncertainties surrounding Covid-19 and the negative impact it has on economic growth could cap price pressures. Covid-19 infections across Singapore’s key trading partners may continue to cap import price pressures and inject headwinds to overall external inflation. On the domestic front, the continued slack in Singapore’s labour market will likely cap wage pressures as well.”

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