Singapore's Consumer Price Index (CPI) rose 2.7 percent year-on-year in May, the highest since March 2013, according to figures released by the Department of Statistics on Monday.
The private road transport cost, which jumped by 8.1 percent, is the main drive that pushed up the figure. MAS and the Ministry of Trade and Industry Singapore (MTI) attributed the rise to base effects associated with the fluctuations in Certificate of Entitlement (COE) premiums.
Accommodation, services and food slowed down slightly, with accommodation cost rising by 0.9 percent compared with 1.1 percent in April, due to a slower pace of increase in imputed rentals on owner-occupied accommodation, MAS said.
And the Core Inflation, which excludes the cost of accommodation and private road transport, fell to 2.2 percent in May from 2.3 percent in April, due to lower contributions from services and food items.
The MAS also said that despite the recent pickup in global oil prices, external price developments should be relatively benign for the rest of the year. Domestic cost pressures, which mainly come from tight labor market, will be the main factor to cause inflation. Taking these factors into account, MAS said that Core Inflation is projected to stay at 23 percent in 2014.
And with the dissipation of the base effect arising from the sharp correction in COE premiums in Q2 2013, CPI-All Items inflation is expected to ease for the rest of 2014, at 1.52.5 percent in 2014./.