Core inflation jumps to 2.1% in December 2021

The growth was driven by the increase in services inflation.

Core inflation jumped to 2.1% on a year-on-year (YoY) basis in December 2021, from 1.6% in November, the latest data from Monetary of Singapore showed.

According to MAS, the core inflation picked up last month due to the increase in services inflation, “driven primarily by a steeper increase in airfares.”

“The progressive establishment of VTLs has allowed the inclusion of some airfares in the CPI and these have come in higher mainly due to mandatory COVID-related testing in the VTL countries and Singapore,” MAS said.

Higher services and accommodation inflation likewise pushed CPI-All items inflation to 4.0% YoY in December.

Services inflation inched up to 2.6% YoY in December, from 1.9% in November, whilst the accommodation inflation rose to 3% from 2.7%.

Food inflation, and electricity and gas inflation also inched up to 2.1% and 10.7% on a YoY basis, respectively.

The cost of retail and other goods also improved in December, falling at a slower pace at -0.7% from -0.9% in November.

Private transport inflation, meanwhile, fell to 15.5% YoY in December, from 17.9% YoY in November.

Given the latest inflation data, MAS said it, along with the Ministry of Trade and Industry, will review their “current forecast ranges for CPI-All Items inflation and MAS Core inflation in 2022.”