Singapore’s MAS core inflation rises to 2.1 pct in December 2021

SINGAPORE, Jan. 24 (Xinhua/APP):Singapore’s Ministry of Trade and Industry (MTI) and Monetary Authority of Singapore (MAS) announced on Monday that the MAS core inflation rose to 2.1 percent year-on-year in December 2021, from 1.6 percent in the previous month.

Meanwhile, the CPI-All Items inflation grew to 4 percent on a year-on-year basis in December 2021, from 3.8 percent in November.

For 2021 as a whole, MAS core inflation came in at 0.9 percent, up from minus 0.2 percent in 2020. CPI-All Items inflation rose to 2.3 percent, from minus 0.2 percent.

Singapore’s MAS core inflation excludes the costs of accommodation and private transport, and CPI-All Items inflation represents the rise in the consumer price index for all items.

According to MTI and MAS, the core inflation rise last December was driven by an increase in services inflation, mainly due to a steeper increase in airfares which reflected the higher costs of travel on Vaccinated Travel Lanes (VTLs).

With the introduction of more VTL flights, actual airfares are progressively incorporated into the CPI, compared to the previous approach of imputing them using the overall change in non-imputed CPI-All Items when there were no flights due to COVID-19.

The steeper increase in airfares in December last year reflected both higher base fares as well as the additional costs of mandatory COVID-19 tests for the newly-introduced VTL flights, the two authorities added.
The rise in CPI-All Items inflation mainly reflected the pickup in core inflation and higher accommodation inflation.

In December 2021, Singapore’s accommodation inflation grew to 3 percent from 2.7 percent in the previous month, as housing rents increased more rapidly.

MTI and MAS said that there remains significant uncertainty surrounding the outlook for inflation in the near term, including from the costs of air travel and commodity prices such as food and oil.

Given the recent stronger-than-projected inflation outturns, including the sharp uptick in airfares, MAS and MTI are reviewing the current forecast ranges for CPI-All Items inflation and MAS core inflation in 2022.