SINGAPORE: Singapore’s overall inflation rose to a more than eight-year high in October, helped by higher car prices and housing rents, while core inflation climbed to its highest in nearly three years.

       Both benchmarks rose faster than economists had predicted.

       Overall inflation jumped to 3.2% on a year-on-year basis, up from 2.5% in September. This is the highest since March 2013 and beats analysts’ 2.8% forecast.

       The uptick reflected stronger private transport and rental costs, in addition to the higher core inflation, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) yesterday.

       Core inflation, which excludes rents and private road transport costs, climbed to 1.5% last month from 1.2% in September. The increase was due to rising services and food prices, and a smaller decline in the cost of retail and other goods.

       The last time the core inflation rate was higher was in March 2019, when it hit 1.7%.

       Core inflation, which better captures the underlying trend in consumer prices, is the measure that MAS monitors most closely in its review of Singapore’s monetary policy.

       MAS and MTI said that rising imported and labour costs, as well as recovery in domestic economic activity, will support a steady increase in core inflation in the quarters ahead.

       The cost of services rose more sharply in October – by 1.6% compared with September’s 1.2% – mainly due to higher inflation of airfares and holiday expenses with the easing of border restrictions and establishment of vaccinated travel lanes.

       Tuition and other fees, as well as prices of recreational and cultural services, also saw larger increases.

       Food inflation edged up to 1.7%, compared with 1.6% in September, as non-cooked food prices rose at a faster pace while the inflation of prepared meals remained broadly unchanged.

       The cost of retail and other goods declined at a slower pace of 0.4% last month, compared with the 1% fall in September, due to a smaller decline in the prices of clothing, footwear and telecommunications equipment.

       Private transport inflation rose to 14.3%, from 10.8% the previous month, on the back of a stronger increase in car prices.

       Accommodation inflation also rose, to 2.5% compared with 1.9% in September, as it was lifted by a larger increase in housing rents.

       However, electricity and gas costs rose at a slower pace of 7.8%, compared with the 9.9% rise in September, due to smaller increases in electricity and gas tariffs from a year ago.

       MAS and MTI said global inflation has remained elevated and this is likely to persist for some time.

       “Notably, higher crude oil prices are supported by tight supply conditions, as well as strengthening demand.

       “The supply-demand mismatch in various commodities and goods markets, as well as bottlenecks in global transportation, are likely to continue in the near term,” they said. — The Straits Times/ANN