SINGAPORE, July 25 (The Straits Times/ANN): Prices continued to climb in June with core inflation hitting 4.4 per cent on a yearly basis - surpassing the previous high of 4.2 per cent in December 2008.
Core inflation, which excludes costs of private transport and accommodation to get a better gauge of Singaporeans' average bills, went up due to higher prices in food, retail and utilities.
The June figure is higher than UOB's projection of 3.8 per cent year on year, but still within Bloomberg estimates of 3.9 per cent to 4.5 per cent.
The headline consumer price index, or overall inflation, for June also went up. It reached 6.7 per cent year on year, led by increases in private transport and accommodation.
This is more than Bloomberg's estimation of 5.8 per cent and UOB's projection of 6.2 per cent.
Projections for the full year have been revised upwards.
For the full year, headline inflation is forecast to come in at between 5 per cent and 6 per cent, while core inflation is projected to average between 3 per cent and 4 per cent.
Data from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) released on Monday (July 25) showed that food inflation came in at 5.4 per cent in June from 4.5 per cent in May. This was a result of larger increases in the prices of both food services and non-cooked food.
Services inflation rose to 3.4 per cent due to a faster pace of increase in the cost of holiday expenses and point-to-point transport services, as well as airfares.
For retail and other goods, inflation came in at 3.1 per cent, up from 1.8 per cent in May. The rise was led by steeper hikes in the cost of medicines and health products, as well as clothing and footwear.
Electricity and gas prices edged up to 20 per cent in June as average prices of electricity plans rose at a faster pace.
Accommodation inflation came in at 4.2 per cent due to a larger increase in housing rents, while private transport costs rose to 21.9 per cent on the back of a pickup in car prices and petrol costs.
Both MAS and MTI said inflationary pressures will remain elevated in the months ahead.
Core inflation is expected to peak in the third quarter before easing towards the end of the year, they said, adding that car and accommodation cost increases are likely to stay firm for the rest of the year.
On the domestic front, the labour market remains tight and wage growth strong.
The authorities noted that upward pressures on Singapore's import prices are also expected to persist.
"Amid firm consumer spending, businesses are likely to pass on the increases in the prices of fuel, utilities and other imported inputs, as well as labour costs, to consumer prices," they added. - The Straits Times/ANN
