Singapore inflation pegged to dip to 3.6%

Thanks to sharp plunge in transport cost.

According to DBS, it’ll be an interesting week for Singapore with the industrial production index and inflation figure for March due this week. 

The former will provide a hint of the growth performance in the first quarter as well as the outlook ahead while the latter will reflect the impact of the recent car financing curbs on the CPI inflation.

Here's more from DBS:

Inflation is up first and a reading of 3.6% YoY is expected, down from 4.9% in the previous month. The main driver is an anticipated sharp drop in transport cost, led by the recent correction in COE premium.

Though hikes in the import tax for cars will lift car prices, the effect from the falling COE premiums will likely override that.

The net impact is probably an easing in inflation but the risk of a deeper drop remains. Note that private transport cost accounts for 11.66% of the entire CPI basket.