Inflation moderates to 5% in May

A combination of weaker oil markets and release of HDB rebates helped push down the overall rise of inflation.

The CPI-All Items inflation slowed to 5% y-o-y in May compared to 5.4% in April due to the gentler cost increases of oil-related items (7.8% from 8.9% in April) and accommodation cost (9.0% from 12.7% in April), according to the latest data from the Ministry of Trade and Industry.

Meanwhile, private road transport cost ballooned to 10.3% from 8.2% in May as COE premiums skyrocketed, blunting the easing of Singapore inflation.

Here's more from MTI:

Singapore’s CPI-All Items inflation eased to 5.0% y-o-y in May 2012 from 5.4% in April. The lower CPI-All Items inflation in May was due to a more moderate rise in the prices of oil-related items and accommodation cost. The overall price increase for domestic oil-related items eased from 8.9% in April to 7.8% in May, reflecting the recent weakness in global oil markets. Accommodation cost inflation fell from 12.7% in April to 9.0% in May, largely due to the timing of the disbursements of rebates for service & conservancy charges (S&CC) for HDB households. Imputed rentals on owner-occupied accommodation (OOA) also rose at a slightly slower pace of 10.4% in May.

In comparison, the increase in private road transport cost picked up from 8.2% in April to 10.3% in May on account of a sharper spike in COE premiums and, hence, car prices. Together, accommodation and private road transport costs accounted for close to two-thirds of CPI-All Items inflation in May.

Services and food inflation rose marginally, by 0.1% point to 2.9% and 2.5% respectively in May.

CPI less imputed rentals on owner-occupied accommodation (CPI-ex OOA) inflation slowed to 4.0% in May from 4.4% in the preceding month. The owner-occupied accommodation sub-group continued to contribute a considerable 1.7% points to CPI-All Items inflation, although this was slightly lower than that in the previous month. This reflected its large weight of 15.6% in the CPI basket and the elevated market residential rentals compared to a year ago. Accordingly, inflation as measured by CPI-ex OOA was lower than CPI-All Items inflation.

MAS Core Inflation remained at 2.7% in May 2012. Excluding the costs of accommodation and private road transport, MAS Core Inflation was stable at 2.7%, as the lower contribution from prices of oil-related items was offset by slightly stronger services and food inflation.