By Chen Lin
SINGAPORE (Reuters) – Singapore’s key consumer price gauge rose 5.5% in February, unchanged from January and lower than forecast, official data showed on Thursday, though while analysts said core inflation appeared to have peaked, prices remained at historic highs.
February’s core inflation rate – which excludes private road transport and accommodation costs – compared with a forecast in a Reuters poll of economists for a 5.8% increase in February.
Lower prices for services were broadly offset in the core inflation data by higher prices for retail, as well as other goods and utilities, the Monetary Authority of Singapore (MAS) said in a statement.
However, the inflation rate in February is still at the same level as in January, which was the fastest pace seen since November, 2008.
MAS has said core inflation was likely to stay at about 5% for the early part of 2023.
It has also projected a core inflation rate of between 3.5% to 4.5% in 2023, with headline inflation coming in at between 5.5% and 6.5%.
Headline inflation was up 6.3% year-on-year in February, compared with a forecast 6.45% increase in a Reuters poll.
While analysts said inflation in February was below their forecasts, there were divisions over the implications for a monetary policy review MAS will conduct in April.
“The inflation may appear high on year-on-year basis, but it has started to moderate more than expected in the past few months,” said MUFG analyst Jeff Ng, who expects no changes to MAS monetary policy in April.
Khoon Goh, head of Asia research at ANZ, said even though core inflation had peaked and should start to edge lower in coming months, MAS would still need to tighten policy in April.
“Inflation is still very high, well above the historical average…MAS will need to tighten further to ensure that inflation expectations remain well anchored,” he said.
The MAS tightened its monetary policy four times last year, including in two surprise moves.
(Reporting by Chen Lin in Singapore; Editing by Ed Davies)