Singapore's inflation sharply accelerated to 1.2%

It exceeded analysts expectation.

According to OCBC, Mar CPI accelerated more than expected from Feb’s low 0.4% yoy (-0.1% mom nsa) to 1.2% yoy (+0.3% mom nsa), which is above expectations for 0.8% yoy (+0.2% mom nsa).

Notably, higher healthcare (+3.4% yoy amid higher medical health insurance costs), education & stationary (+2.9% as tuition & other fees rose), food prices (+2.9%, partly attributable to more expensive fruits and cooked hawker food), and recreation & others (+2.5% due to the excise duty hike for liquor, cigarette and tobacco products from 21 Feb) were the key drivers of the inflation pick-up in March.

Here's more from OCBC:

Looking ahead, we expect headline CPI inflation to cross the 2.5% yoy threshold from April and stay elevated for the rest of the year, but full-year inflation average should still hold to our 2% yoy forecast, which is within the official 1.5-2.5% forecast.

Note MAS core CPI rose 2.0% yoy (+0.2% mom), also ahead of our of +1.9% forecast, due to higher food price and services costs.

Given the MAS core CPI is currently already on a faster ascent trajectory as it does not benefit from the “negligible” impact of car price inflation and stabilization of imputed rentals, we tip that core inflation will also sustain above 2% from here and average 2.2% yoy
(official forecast: 2-3%).

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