Singapore inflation accelerates as car prices surge

Singapore’s inflation accelerated sharply in March, led by a jump in the cost of cars and housing, suggesting the central bank may tighten monetary policy further when it comes up for review in October.

The city-state’s consumer price index (CPI) rose 5.2% in March from a year earlier, the government said on Monday, far exceeding February’s 4.6% pace and beating the estimates of all 11 economists polled by Reuters.

“Singapore is in danger of losing its low inflation status,” Robert Prior-Wandesforde of Credit Suisse said in a client note.   

“The current episode is the second ’major’ inflation shock Singapore has experienced in the last four years; but what makes this time different from 2008 is that inflation in most other Asian countries remains well contained.”