Singapore’s key inflation gauge accelerated for the first time since September driven by an increase in healthcare, education and food prices.
The core inflation rate, which excludes housing and private transportation costs, stood at 0.7% in April from a year earlier, compared with 0.5% in March, according to a statement by the Department of Statistics Singapore. That’s also higher than the median estimate of 0.5% in a Bloomberg News survey of analysts and ends six straight months of deceleration.
Overall inflation rate held steady at 0.9% last month, higher than the 0.8% median estimate. The annual healthcare inflation rate was 2.5% in April, higher than the 1.8% in March. Food prices increased 1.4% in April from a year ago while education climbed 0.5%.
Last month, Singapore’s central bank said the trade war may add to disinflationary pressures as weaker global demand weighs on the cost of commodities and manufactured goods. The city-state relies on imports for the lion’s share of its basic goods.
Some exports destined for the US may also be redirected to countries like Singapore, increasing the domestic supply of goods and lowering prices, the Monetary Authority of Singapore added. It expects both core and headline inflation to average 0.5%-1.5% this year.
Cooling price pressures have given the central bank room to ease monetary policy twice this year, as the risk of higher US tariffs dim the growth outlook for the trade-reliant nation.
This was further underlined after Singapore flagged the risk of a technical recession on Thursday, despite a better-than-expected growth number in the first quarter. The MAS, which holds quarterly monetary policy reviews, will next announce its decision in July.
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