APRILASIA BUSINESS OUTLOOK8SINGAPORE ECONOMY INFLATION DRIVEN BY CHINESE NEW YEAR SPENDINGCHINA PROHIBITS USAGE OF INTEL & AMD CHIPS IN GOVERNMENT SYSTEMSSingapore's core inflation surged to 3.6 percent year-on-year in February, marking its highest level since July 2023. This increase, up from January's 3.1 percent, surpassed economists' forecasts of 3.4 percent, driven primarily by elevated services and food inflation associated with Chinese New Year spending. The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) highlighted these factors in a statement on Monday.Core inflation, which excludes private road transport and accommodation costs, reached its highest point since July 2023, when it stood at 3.8 percent. Overall or headline inflation also saw an uptick to 3.4 percent year-on-year in February from 2.9 percent in January, primarily due to increased accommodation costs. Accommodation inflation climbed to 3.9 percent, up from 2.1 percent in January, as additional Service & Conservancy Charges (S&CC) rebates disbursed in January were not repeated in February.Services inflation rose to 4.2 percent in February from 3.3 percent in January, driven by higher airfares and a notable increase in holiday expenses. Similarly, food inflation increased to 3.8 percent compared to 3.3 percent in January, with prices of both cooked and non-cooked food rising at a faster pace.However, there were some areas of moderation. Electricity and gas inflation dipped to 5.3 percent due to a slower increase in electricity costs, while private transport inflation decreased from 2.9 percent in January to 1.4 percent in February, attributed to a slower rate of increase in car prices, reflecting lower COE premiums. China has introduced guidelines aimed at phasing out US microprocessors from Intel and AMD from government personal computers and servers, as reported by the Financial Times on Sunday. The procurement guidance also aims to sideline Microsoft's Windows operating system and foreign-made database software in favor of domestic options, the report said. Government agencies above the township level have been instructed to include criteria requiring "safe and reliable" processors and operating systems when making purchases, according to the newspaper.China's industry ministry issued a statement in late December with three separate lists of CPUs, operating systems, and centralized databases deemed "safe and reliable" for three years after the publication date, all from Chinese companies, Reuters checks showed.The State Council Information Office, which handles media queries for the council, China's Cabinet, did not immediately respond to a faxed request for comment. Intel and AMD did not immediately respond to Reuters' request for comment. The US has been aiming to boost domestic semiconductor output and reduce reliance on China and Taiwan with the Biden administration's 2022 CHIPS and Science Act. This act is designed to bolster US semiconductors and contains financial aid for domestic production with subsidies for the production of advanced chips. NEWSROOM
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