Singapore: Inflation remains surprisingly high in May
June 23, 2011
In May, consumer prices added 0.6% over the previous month, which was twice the 0.3% price hike recorded in April. Prices for all but one of the main categories either dropped or remained unchanged over the previous month. However, prices for housing, which rose 3.1% month-on-month, offset the subdued developments in other price categories. Housing costs increased as rebates for service and conservancy charges (S&CC) were being given in April but not in May. Owing to the relatively strong monthly rise, annual inflation remained unchanged at 4.5%, which overshot market expectations that had annual inflation dropping to 4.1%. The Monetary Authority of Singapore (MAS) tightened its policy stance on 14 April, when it raised the Singapore dollar trading band. Meanwhile, annual average inflation, which is the reference for monetary policy decisions, inched up to 4.1% in May. The MAS anticipates inflation to average between 3.0% and 4.0% this year.