Chart of the Day: Inflation rose in April after easing in Q1

CPI-All Items inflation came in higher at 5.4% in April 2012.

The Monetary Authority of Singapore reported:

CPI-All Items inflation moderated from 5.5% in Q4 2011 to 4.9% in Q1 2012 due to the lower contribution of oil-related items, food and, notably, cars. Meanwhile, accommodation cost, which remained the single largest contributor to CPI-All Items inflation, increased by 10.1%, led by the sharp rise in residential property rentals.

Services inflation rose from 1.6% in Q4 2011 to 3.2% in Q1 2012. Around 1% point of the increase in services inflation was due to the removal of radio and TV license fees last year. There was also a more rapid pass-through of higher wage costs to prices of consumer services such as healthcare and education services.

Reflecting the pickup in services inflation, MAS Core Inflation, which excludes the costs of accommodation and private road transport, rose from 2.4% in Q4 2011 to 3.1% in Q1 2012. In April 2012, CPI-All Items inflation came in higher at 5.4%. The increase largely reflected the higher contribution from accommodation, which was due to the low base last year when the government disbursed a large quantum of S&CC rebates.

Car prices also rose sharply on the back of the recent surge in COE premiums. Together, accommodation and private road transport costs accounted for two-thirds of CPI-All Items inflation in April 2012. In comparison, price increases for services, food and oil-related items slowed. MAS Core Inflation thus edged down from 3.1% in Q1 to 2.7% in April.