Inflation in Singapore cooled in March, official data showed Tuesday, thanks to a fall in private transport costs, as well as lower food and services inflation. 

The Monetary Authority of Singapore’s core inflation figure, which excludes accommodation and private transport, for March eased to 3.1% year-on-year from 3.6% in February. This was below the 3.5% median forecast by economists polled by Bloomberg.

The core consumer price inflation figure fell by 0.2% in March compared to February.  

The headline figure, which includes accommodation and private transport, eased to 2.7% from a year prior in March. This was lower than February’s headline figure of 3.4% as well as below the 3.1% forecast by economists polled by Bloomberg. Headline inflation fell 0.1% on a monthly basis.

“The March inflation numbers were lower than market expectations, mainly due to a steeper than anticipated deflation in private transport costs,” Ahmad Mobeen, senior economist at S&P Global Market Intelligence, told Diplomatic Network (Asia) on Wednesday. 

External factors 

“Although crude oil prices have risen in recent weeks, global prices for most food commodities, as well as intermediate and final manufactured goods, have continued to decline,” MAS said. 

“In addition, inflation for services associated with overseas travel should moderate further over the course of the year as supply conditions in hospitality sectors around the world improve.” 

Domestic front 

Increases in unit labor costs have slowed, MAS said, amid a cooling labor market. This will be good for businesses, but these breezy winds are unlikely to be passed on to consumers. 

“Businesses are likely to continue passing through the earlier increases in labor and other business costs to consumer prices, albeit at a reduced pace,” MAS said. 

Deep dive 

Private sector transport inflation saw deflation of 0.3% year-on-year thanks to lower certificate of entitlement premiums. COE premiums are part of a system used in Singapore to regulate vehicle ownership and control the number of vehicles on the road. 

“According to data by the Land Transport Authority, all categories experienced significant year-on-year contractions in their premiums and prevailing quota premiums (for existing vehicles) as of March 2024, with three categories registering double-digit declines (larger cars, commercial vehicles, and motorbikes), and one nearly reaching double digits (smaller cars),” Mobeen said.  

Food inflation dropped to 3.0% in March from 3.8% in February. This was mainly thanks to a slower increase in non-cooked food prices, led by a 5.6% decline in fish and seafood prices.  

“Though prices of food serving services was almost unchanged month-over-month, the level of restaurant, fast food, and catering food price inflation remains elevated,” Mobeen said.  

Services inflation moderated to 3.9% in March from 4.2% in February. 

“[This was] influenced by lower airfares amid the fading impact of festivities-related expenses from the Lunar New Year,” Mobeen said.  


Despite the promising CPI reading for March, risks to the inflation outlook remain. 

“Fresh geopolitical shocks and adverse weather events around the world could put upward pressure on global energy and food commodity prices, as well as shipping costs,” MAS said. 

“Domestically, a stronger-than-expected labor market could also lead to a re-acceleration in wage growth. Conversely, an unexpected weakening in the global economy could induce a greater easing of cost and price pressures.” 

Core inflation is likely to remain elevated in the coming months, Mobeen said, as Singapore increases the cost of water.  

“Singapore will raise the price of water by 18% in two phases over the next two years, with first phase in April 2024,” Mobeen said, adding that rising costs in sectors like education and healthcare will also fan inflation.  

Core inflation is expected to decline in the fourth quarter and into 2025, Mobeen said.

For 2024 as a whole, both headline and core inflation are projected to average between 2.5% and 3.5%, according to MAS.

*(24/04/2024) Correction: specified that it is “core inflation” being referred to in the second last sentence. Added attribution to Ahmad Mobeen, senior economist at S&P Global Market Intelligence, in the same sentence.