Singapore's inflation eased to the lowest level in three months in May despite high car and housing costs, the latest figures from the Department of Statistics showed Monday.
Inflation dropped to 5 percent from April's 5.4 percent. Economists had forecast the rate to fall to 5.1 percent. The moderation was due to slower rise in the prices of oil-related items and accommodation costs.
The overall price increase for domestic oil-related items eased from 8.9 percent in April to 7.8 percent in May, reflecting the recent weakness in global oil markets. Accommodation cost inflation fell from 12.7 percent in April to 9 percent in May.
Core inflation that excludes private road transport and accommodation costs remained steady at 2.7 percent in May. It is the lowest rate since January.
Housing costs were 8.2 percent higher in May than a year earlier. Excluding costs of accommodation, the CPI was up 4 percent on an annual basis.
Food prices increased 2.5 percent year-on-year. Prices of clothing and footwear increased just 0.4 percent from last year.
Transport charges climbed 9.2 percent. Costs of private transportation were 10.3 percent higher than May last year on account of a sharper spike in COE premiums and, hence, car prices.
Singapore last month relaxed its control on the number of private vehicles on the road, suggesting a reduction in the cost of owning a car in the coming months.
The Land Transport Authority said in May that it will allow the vehicle population to grow at an annualised pace of 1 percent from August 2012 to January 2013. The move is expected to reduce inflationary pressures in the economy.
Economists surveyed by the Monetary Authority of Singapore (MAS) forecasts the consumer price inflation and MAS core inflation to come in at 4.2 percent and 2.7 percent respectively in 2012.
Singapore's central bank in April tightened monetary policy by allowing faster gains in the currency amid persistent inflationary pressures. The central bank upped its 2012 forecast for headline inflation to 3.5-4.5 percent from 2.5-3.5 percent estimated previously.
The forecast on core inflation was raised to 2.5-3 percent from previously forecast 1.5-2 percent.
by RTT Staff Writer
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