, Singapore

Inflation up by 0.7% in February

Inflation was driven by private transport costs.

The rate of price increase sped up again in February by 0.7%, according to latest government data.

This may be a start of a trend of positive headline inflation for 2021, following the 0.2% recorded in January.

Private transport prices were a key driver in the rise of headline inflation, picking up by 4.2% in February.

Inflation in the services sector reversed to 0.5% from the -0.3% recorded for the same month last month due to higher tuition fees, dampened by a decline in outpatient service costs.

Food inflation rose to 1.6% due to higher prices in non-cooked food. Accomodation remained flat at a 0.5% rate, the same as January's figures.

Electricity and gas costs continue to sink at a rate of -9.8%.

The government expects prices to continue to rise in the future.

"In the quarters ahead, external inflation is likely to pick up amid the recovery in global oil prices. Notably, Brent crude oil prices have risen further since Q4 2020, supported by output cuts among OPEC+ members," the Monetary Authority of Singapore and Ministry of Trade and Industry said in a joint statement.

The agencies expect cost pressures to stay low domestically, due to subdued wage growth and commercial rents.

The Monetary Authority is set to revise its forecast on the full-year headline inflation, given the "sharper-than-expected" price increases in non-core items. It expects core inflation to fall between the 0-1% range for the full year of 2021.

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