S'pore consumer price index up for 2nd straight month: Poll

People along the Marina Bay Waterfront Promenade with the skyline of Singapore Central Business District (CBD) in the background.
People along the Marina Bay Waterfront Promenade with the skyline of Singapore Central Business District (CBD) in the background. PHOTO: ST FILE

0.7% increase fastest annual climb since Sept 2014, it shows; core inflation up 1.2% from a year earlier in Feb

Singapore's consumer price index probably rose at the fastest annual pace in more than two years last month, a Reuters poll showed.

The poll's median showed an increase of 0.7 per cent, compared with 0.6 per cent in January.

Economists noted that the index in February last year dropped 0.8 per cent from a year earlier, so the base for comparison with last month is low. A climb of 0.7 per cent would be the highest since September 2014, when the index rose that much from a year earlier.

Also according to the poll, the Monetary Authority of Singapore's (MAS) core inflation measure likely increased 1.2 per cent from a year earlier in February, compared to 1.5 per cent the previous month.

This comes after Singapore's headline CPI in January grew at the fastest pace in two years due to increases in the prices of oil-related items and higher services inflation.

"(February figure) is just a continuation of the trend of dissipating disinflation" said Mizuho Bank economist Vishnu Varathan.

The central bank's core inflation measure excludes changes in the prices of cars and accommodation, which are influenced more by government policies.

Headline CPI rose for the first time in two years in December. Now, analysts feel more positive about the economic outlook.

Singapore's economy grew stronger than expected in the fourth quarter of last year, and export numbers are strongest in five years thanks to a sharp rebound in manufacturing in the electronics sector.

"The economic outlook has turned for the better... a turnaround, albeit still uneven, is in the making", DBS said in a research note.

Most analysts now expect Singapore's central bank to keep the monetary policy unchanged at its next policy review next month.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 21, 2017, with the headline 'S'pore consumer price index up for 2nd straight month: Poll'. Print Edition | Subscribe