InvestorCrypto.net - The inflation rate in Singapore soared beyond expectations in February 2024.
According to the Business Times, the overall inflation for that month stood at 3.4% annually, the highest since July of the previous year.
In contrast, inflation in the Lion City was recorded at only 2.9% in January 2024. The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) explained that the higher inflation reflects an increase in accommodation inflation, in addition to core price increases.
Core inflation, which excludes accommodation and private transportation, rose to 3.6% annually, up from 3.1% in the previous month.
"This is due to higher service and food inflation, partly reflecting seasonal effects related to Chinese New Year," wrote MAS and MTI in their announcement on Tuesday (26/3). On a monthly basis, overall inflation rose by 1% in February, while core inflation increased by 0.5%.
MAS and MTI have maintained their full-year inflation forecast, with overall and core inflation expected to range between 2.5% and 3.5%.
By not accounting for the temporary impact of the increase in goods and services tax to 9%, overall inflation and core inflation are projected to be in the range of 1.5% and 2.5%.
MAS and MTI explained that accommodation inflation rose to 3.9%, up from 2.1% in the previous month. This was due to additional discounts on service and maintenance fees, which were disbursed in January but not in February.
Service inflation rose to 4.2% year-on-year, up from 3.3% in the previous month, primarily driven by increases in airfare and sharp increases in holiday costs.
Food inflation also showed an increase to 3.8% this year, up from 3.3% in January. The rise was attributed to faster increases in both cooked and uncooked food prices.
Meanwhile, electricity and gas inflation decreased to 5.2% year-on-year, down from 5.3% previously, due to a slower pace of electricity cost increases.
Retail and other goods inflation decreased to 1.2%, down from 1.4% in the previous month, as alcoholic beverage and tobacco prices saw a slight increase.
Private transportation inflation decreased to 1.4% year-on-year, down from 2.9% previously, due to a slower rate of increase in car prices, reflecting lower certificate of entitlement premiums.
In conclusion, the significant rise in inflation in Singapore in February 2024 has been attributed to various factors such as accommodation, food, and service cost increases.
The Monetary Authority of Singapore and the Ministry of Trade and Industry are closely monitoring the situation and have adjusted their forecasts accordingly to ensure the stability of the economy.
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