Singapore's headline inflation inched up to 1.6 percent in May from a year-on-year rise of 1.5 percent in April, despite falling cost of the private road transport, authorities said on Monday.
The cost of private road transport fell by 3.7 percent year-on- year in May, the first decline since 2009. The fall was mainly due to lower premiums for the COE (certificate of entitlement), a certificate of car ownership which is required for anyone who wants to own a car in Singapore and available through open bidding.
Singapore government recently announced a set of measures related to the car ownership, following surging COE premiums over the past several years.
The Monetary Authority of Singapore said the accommodation costs increased 5.1 percent in May, up from 2.4 percent in April as the one-off rebates for services for the public housing estates and conservancy charges was available in April only.
Imputed rentals on owner-occupied accommodation continued to increase, contributing 0.9 percentage point to overall inflation in May.
Services inflation rose 2.5 percent in May from 2.2 percent in April, mainly due to costlier medical treatment and medical insurance as well as a smaller fall in holiday travel cost.
The core inflation monitored by the Monetary Authority, which excludes the costs of accommodation and private road transport, rose to 1.7 percent in May from 1.4 percent in April, largely due to steeper increases in services fees and food prices.
The central bank said that it expects imported inflation to most likely remain subdued this year, given ample supply buffers in the commodity markets. However, domestic cost pressures are expected to persist amid a tight labour market and cost pass- through to prices of consumer services could also pick up slightly.
The core inflation is expected to rise moderately in the second half and average 1.5 percent to 2.5 percent this year.
The central bank expects the full-year headline inflation to average 3 percent to four percent.