Inflation picks up in March from the prior month

Latest reading: Consumer prices were up 4.1% in annual terms in March, following a 2.4% increase in the previous month. March's reading was the strongest since July 2024 and exceeded both market expectations and the ceiling of the Central Bank’s 2.0–4.0% target range. Relative to the prior month's data, there were higher price pressures for food and non-alcoholic beverages (+3.0% on a year-on-year basis vs +1.8% in February), clothing and footwear (+2.6% vs +2.4% in February), housing and utilities (+4.5% vs +3.5% in February) and transport (+9.9% vs -0.3% in February). Lastly, consumer prices increased 1.37% in March on a seasonally adjusted month-on-month basis, following a 0.15% increase in the previous month.

Panelist insight: United Overseas Bank’s Julia Goh and Loke Siew Ting commented on the outlook: “Reflecting the sharperthanexpected increase in March inflation and the prolonged disruptions stemming from the Middle East conflict, we now raise our fullyear 2026 inflation forecast to 5.5% (from 3.0% previously). Year-ago low base effects and an expected continued weakness in the PHP are likely to further amplify inflationary pressures. In the near term, nonmonetary interventions by the national government—particularly to contain prices of essential food items, electricity, and public transport—will be critical to keeping inflation in check.”

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