S'pore's inflation in Feb 2013 up 4.9% on-year
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SINGAPORE: Singapore's inflation rate came in higher than expected in February after food prices rose during the Lunar New Year holidays, as well as further increases in the cost of owning a car.
Data from the Department of Statistics show the Consumer Price Index (CPI) in February rose by 4.9 per cent from a year earlier, after increasing 3.6 per cent on-year in January. Forecasters had expected a year-on-year rise in February of about 4.1 per cent.
The Lunar New Year was observed in February this year and economists noted that the celebrations tend to put upward pressure on prices due to higher demand for food and services.
Private transport costs, which include the price of certificates of entitlement (COE) used for the purchase of cars, climbed 17.4 per cent in February 2013. The increase was partly due to the low base of COE premiums a year ago.
The step-up in private road transport cost alone accounted for over two-thirds of the 1.3 percentage point rise in overall inflation.
In a joint statement, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry said the "temporary pickup" had been anticipated in the January Inflation report.
Food prices increased by 2.3 per cent in February, compared to a one per cent rise in January. However, accommodation cost inflation eased to 5.9 per cent following a 6.1 per cent rise in January.
Prices of oil-related items declined by 0.2 per cent, reflecting the lower electricity tariff. But petrol pump prices increased in tandem with global oil prices at the beginning of 2013.
The MAS expects persistent tightness in the domestic labour market will support wage increases in 2013, some of which will be passed through to consumer prices.
The central bank expects core inflation this year to average two to three per cent, while with motor vehicle-related policy measures in February, CPI-All Items inflation is forecast to remain at 3.5 to 4.5 per cent.
-CNA/ac -
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