A shopper browses vegetables at a wet market in Singapore, on Wednesday, Dec. 22, 2021. <\/p>\n
Bloomberg | Bloomberg | Getty Images<\/p>\n
Inflation in Singapore held steady at 1.8% in May, falling short of economists’ expectations as lower prices for telecommunication services helped offset increases in private transport, accommodation, retail and food costs.<\/p>\n
The figure was below the 2% expected by economists polled by Reuters and unchanged from the 1.8% recorded in April.<\/p>\n
Higher car and motorcycle prices drove up private transport inflation.<\/p>\n
Core inflation, which strips out accommodation and private transport costs, came in at 1.4%, against the 1.6% forecast.<\/p>\n
The Monetary Authority of Singapore said in a statement<\/a> that while energy prices have eased recently, they remain elevated relative to 2025 levels. <\/p>\n “As higher energy costs pass through global supply chains with a lag, they are expected to raise production and transport costs for a wider range of Singapore’s imported goods and services over time,” the central bank wrote.<\/p>\n It also said that service labor costs are likely to increase at a slower pace this year as nominal wage growth eases, adding that domestic consumer spending could turn more cautious amid the economic uncertainty.<\/p>\n The data also comes as Singapore’s\u00a0central\u00a0bank\u00a0tightened its\u00a0monetary\u00a0policy\u00a0settings<\/a> in April, its first policy tightening since April 2022, citing inflation risks stemming from the conflict in the Middle East.<\/p>\n Unlike most central banks, the MAS manages monetary policy through the exchange rate rather than interest rates. It allows the Singapore dollar to move within an undisclosed policy band against a basket of currencies of its major trading partners.<\/p>\n At its April policy review, the MAS raised its forecasts for both core and headline inflation to 1.5% to 2.5% for the year, from 1% to 2% previously.<\/p>\n The inflation report follows stronger-than-expected economic growth in the first quarter. Gross domestic product expanded 6% in the first quarter from a year earlier, exceeding the 5.1% growth forecast in a Reuters poll.<\/p>\n