May core inflation in Singapore rises 4.7% year-on-year, matches forecast

Singapore prices rose 4.7 per cent year-on-year in May, official data showed on Friday (June 23), slower than the month before due to a decline in food and services costs.

The May core inflation rate — a key consumer price gauge that excludes private road transport and accommodation costs — compared with the five per cent seen in April and matched a Reuters poll of economists.

The second half of 2023 would see core inflation moderate further, the Monetary Authority of Singapore (MAS) and the trade ministry said in a statement.

Headline inflation was up 5.1 per cent year-on-year in May, compared with a forecast 5.5 per cent increase in a Reuters poll.

The central bank has said this year's core inflation is expected to average 3.5 per cent to 4.5 per cent, while headline inflation is forecast at 5.5 per cent to 6.5 per cent for the period.

MAS left its monetary policy settings unchanged in April, after tightening five times in a row since October 2021, reflecting concerns over the city-state's growth outlook. Given slowing core inflation, economists expect the central bank to continue its pause at its next review in October.

MUFG economist Jeff Ng said he expects core inflation to continue easing in the coming months even though price pressures may remain.

"A slower economy may also dampen demand-pull inflation," Ng said.

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