Inflation rose 3.5 per cent in March compared with the same month last year, helped by a slowdown in housing prices, the Department of Statistics said on Tuesday.

The pace of inflation slowed considerably from February's 4.9 per cent rate

In fact, when compared with Feburary, prices actually fell 0.5 per cent, largely the result of lower COE prices.

But both healthcare education costs continued to rise strongly, as a result of a tight labour market. Healthcare costs rose 3.9 per cent while education and stationery 3.5 per cent compared with last March.

The Government now expects inflation to come in at between 3 per cent and 4 per cent for the full year.