Yahoo Finance Singapore sees inflation bump from Lunar New Year spending
By Kevin Varley
(Bloomberg) — Singapore’s core inflation quickened in February as expected on seasonally stronger demand around the Lunar New Year, and is unlikely to worry the central bank as it prepares to review monetary policy settings next month.
The core measure, which excludes housing and private transportation costs, accelerated to 3.6% last month from a year ago, official data showed Monday. That was slightly faster than the median 3.4% gain expected in a Bloomberg survey of economists, and compares with 3.1% in January.
Core inflation climbing to the highest level in seven months was expected amid higher spending during the Lunar New Year holiday. Still, the Monetary Authority of Singapore and the Ministry of Trade and Industry kept their 2.5%–3.5% forecast for 2024 underlying inflation, allowing room for policymakers to support economic growth.
The Southeast Asian economy is expected to grow between 1% and 3% this year, according to official forecasts shared previously.
The MAS watches the core measure closely to determine policy settings, which it has kept steady for the past three meetings. The next MAS review is due in April, and comes amid major central banks around the world moving closer toward interest-rate cuts.
The MAS uses the exchange rate as its main policy tool rather than interest rates, allowing the local dollar to appreciate or depreciate to check imported inflation and support trade. While Singapore is heavily dependent on imports of food and energy, the value of its exports are equivalent to more than one-and-a-half times the size of the island’s economy.
Other Details
Singapore’s all-items inflation accelerated to 3.4% in February from a year ago compared with the 3.2% median estimate and 2.9% in January
Housing and utilities inflation quickened 3.9% from a year earlier
Food inflation quickened 3.8% on-year
Transport inflation was 2.3% year-on-year
Recreation and culture inflation climbed to 5.5%
Healthcare inflation was at 4.6%
—With assistance from Tomoko Sato.
©2024 Bloomberg L.P.
