S'pore core inflation rises more than expected to 3.6% in February

Increase fuelled by higher services and food inflation; overall inflation also jumps to 3.4%

- Claire Huang

Consumer prices in February shot up more than expected on the back of higher services and food inflation partly linked to Chinese New Year spending.

Official data released on March 25 showed that core inflation, which excludes private transport and accommodation costs to better reflect the expenses of households here, rose to 3.6 per cent year on year in February, up from January's 3.1 per cent.

This was the highest reading for core inflation since July 2023.

Overall or headline inflation also jumped to 3.4 per cent in February from 2.9 per cent in January, on the back of a pickup in accommodation inflation.

As Chinese New Year fell in February in 2024 but in January in 2023, year-on-year inflation in February was boosted by seasonal factors associated with the festivities, the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) said in their joint report.

Still, the rise in February's core and overall consumer prices beat analyst forecasts. A Reuters survey of economists had tipped core inflation to come in at 3.4 per cent and overall inflation at 3.3 per cent.

Oxford Economics senior economist Alex Holmes said the increases are much higher than expected, but noted that there are a few caveats to the trend.