Singapore’s April inflation data released earlier today showed that headline CPI fell for the 18th straight month by 0.5% y/y (0.1% m/m nsa). However, the pace of declines was modest compared to March reading of -1.0% y/y (0% m/m nsa). MAS core inflation accelerated from +0.6% y/y in March to +0.5% in April. The headline and core CPI inflation for the year-to-date stood at -0.7% y/y and +0.6% respectively.
Positive contribution was seen from services inflation which picked up from 0.4% to 0.7% amid more costly holiday travel and domestic services (including FDW and other domestic house cleaning services etc). On the other hand the main drag was from transport (-5.4% y/y), household & utilities (-1.9%) and communications (-1.9%).
MAS-MTI’s April inflation outlook was largely unchanged, with the only minor difference being that “the increase in core inflation will be mild”, rather than “milder” in the March statement.
“Our view is that headline inflation may attempt to bottom in 2Q16, but stay subdued for the rest of the year due to the continuing drag from disinflationary asset prices and notwithstanding the slight uptick in global crude oil prices.” said OCBC Economist, Ang Jun Yu Kelvin, in a report.
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