Economic Highlights (Singapore) - 24/04/2014

Inflation Rose In March But Will Likely Remain Manageable

¨      Singapore's consumer price index (CPI) rose to 1.2% y-o-y in March from +0.4% in February but lower compared to 1.4% in January, due mainly to higher food and recreation & other prices. In parallel, the core inflation, which excludes accommodation and private road transport, rose to 2.0% y-o-y in March, up from +1.6% in February.

¨      On a monthly basis, inflation rose by 0.3% in March, after remaining unchanged in February, while the st core inflation increased by 0.2%, a rebound from -0.2% in February, pointing to upward price pressure.

¨      Going forward, we forecast the inflation rate to trend up to an average of 2.8% in 2014 but will likely remain manageable compared with +2.4%in 2013. In this regard, we foresee active role from the MAS and the modest gradual appreciation of the NEER continues to be appropriate.

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