Singapore Inflation May 2019


Singapore: Inflation jumps to a two-year high in May, while core inflation is stable

June 24, 2019

Consumer prices increased 0.7% over the previous month in May, following the 0.3% decrease recorded in April. According to data released by Statistics Singapore, the jump was primarily caused by higher prices for housing and utilities, which was partially offset by lower prices for communication.

Inflation ticked up to 0.9% in May, slightly higher than April’s 0.8% rise and beating analysts’ expectations of 0.6%. Meanwhile, annual average inflation was stable at April’s 0.6% in May.

The Monetary Authority of Singapore’s (MAS) core inflation measure, which omits the costs of accommodation and private road transport, was unchanged at 1.3% in May. The reading matched analysts’ expectations.

Commenting on May’s inflation print, Khoon Goh, head of Asia research at ANZ, noted:

“The ratio of job vacancies to unemployed persons, typically a leading indicator for core inflation, has started to decline. This suggests that inflationary pressures from the labour market are easing. In addition, despite the recent increase in Brent oil prices on the back of Iran tensions, global oil prices are lower compared to year ago levels, and is set to be a drag on the MAS Core Inflation over the coming months. With the Great Singapore Sale set to push retail prices lower in June, we see the MAS Core Inflation falling towards 1% y/y in the next few months.”

Our panelists see inflation remaining mild overall this year, dampened by the impact of the Open Electricity Market (OEM) and tepid economic growth.

In 2019, the MAS expects CPI inflation to average between 0.5% and 1.5%, and core inflation to average between 1.0% and 2.0%. FocusEconomics Consensus Forecast panelists, meanwhile, expect CPI inflation to average 0.9% in 2019, which is unchanged from the previous month’s forecast. In 2020, our panel expects average inflation of 1.4%.

Author:, Economist

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Singapore Inflation Chart

Singapore Inflation May 2019

Note: Annual and monthly variation of consumer price index in %.
Source: Statistics Singapore (Singstat).

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