Singapore's MAS Core Inflation rises to 0.5pc in March
The Ministry of Trade and Industry (MTI) and Monetary Authority of Singapore (MAS) said that the MAS core inflation rose to 0.5 percent on a year-on-year basis in March, from 0.2 percent in February.
This was driven by higher services inflation, as well as smaller declines in the retail and other goods costs and in the electricity and gas costs.
Meanwhile, Singapore's CPI-All Items inflation came in at 1.3 percent on a year-on-year basis this March, compared to 0.7 percent in February. The uptick reflected higher private transport inflation, in addition to the rise in core inflation.
Singapore's MAS core inflation excludes the costs of accommodation and private road transport, and CPI-All Items inflation represents the rise in the consumer price index for all items.
In March, Singapore's services costs grew 1.2 percent, compared to the 0.5 percent increase in the previous month. The costs of retail and other goods declined 1.5 percent, compared to the 1.9 percent decrease in February. The costs of electricity and gas declined 9.7 percent, compared to the 9.8 percent decrease in the previous month. The private transport costs rose 7.2 percent in March, compared to the 4.2 percent increase in February.
MTI and MAS said that the MAS core inflation is expected to average 01 percent in 2021, while the forecast range for CPI-All Items inflation is 0.51.5 percent. The evidence so far suggests that supply chains haven't adjusted significantly because of the COVID-19 pandemic, an International Monetary Fund (IMF) official has said, while noting that it's a little bit early to tell the exact impact.
"To be honest, so far the evidence that we have seen, the actual numbers that we see do not say that supply chains have adjusted significantly because of the pandemic," Helge Berger, IMF's China mission chief and assistant director in the Asia and Pacific Department, told Xinhua recently.
"Maybe a little bit early to see this, but it could also be that firms have come to the conclusion that this will be a short-term problem, relatively speaking, that doesn't on its own, require a major sudden adjustment of the way they organize production," he said.
The IMF official, however, noted that there are ongoing trends that the pandemic could have accelerated.
Berger said many firms over the last years have decided to bring production capacity from outside China into China. "These are firms who have come to the conclusion that it is more economical to produce inside (China), what is going to be a large future market," he continued.
Meanwhile, he noted that some other firms may have concluded that after the trade disputes, now there's a pandemic, there are also "risks" to have a very global, very decentralized setup of supply chains. "And they may have decided to build more redundancies, to have alternatives producers lined up, that process I presume will also continue," said the IMF official. Noting that there are "different forces" at work, with many older than the pandemic, Berger said it's a little bit early to say in which way exactly the pandemic has impacted supply chains.
Hong Kong and Singapore on Monday announced plans to resurrect their scrapped coronavirus travel bubble with dedicated flights between the two cities starting on May 26. The two business hubs had to abandon a highly anticipated quarantine-free travel corridor late last year after Hong Kong was hit with a fourth wave of infections.
From May 26, one flight per day carrying up to 200 passengers will shuttle between the two cities. Cathay Pacific and Singapore Airlines will share the route with two daily flights planned from June 10 onwards.