Singapore's consumer price index (CPI) rose by 5.0 percent in May, contracting from 5.4 percent in the previous month, the Department of Statistics said on Monday.

The lower increase was mainly due to a more moderate rise in the prices of oil-related items and accommodation cost.

"The overall price increase for domestic oil-related items eased from 8.9 percent in April to 7.8 percent in May, reflecting the recent weakness in global oil markets," the Monetary Authority of Singapore (MAS) said in a joint press release with the Ministry of Trade and Industry.

Meanwhile, the housing costs rose by 8.2 percent year on year, easing from the previous month's inflation of 11.1 percent. Its sub-index named accommodation cost inflation fell from 12.7 percent in April to 9.0 percent in May, largely due to the timing of the disbursements of rebates for service and conservancy charges for HDB households, the MAS said.

The cost of transport, however, rose 9.2 percent on year, accelerating from last month's 7.5 percent. The increase mainly attributed to a sharper spike in Certificate of Entitlement (COE) premiums and, hence, car prices, which pulled the private road transport cost inflation of May up to 10.3 percent, a sharp rise from 8.2 percent in April.

Food prices also rose by 2.5 percent, while the prices of clothing and footwear rose by 0.4 percent.

The Core Inflation measured by the MAS remained 2.7 percent in May, "as the lower contribution from prices of oil-related items was offset by slightly stronger services and food inflation."

The MAS said headline inflation could average around 5 percent year on year in the first half of the year before easing gradually in the second half.

"Accommodation cost will remain the largest contributor to CPI- All Items inflation this year," while "car prices are still expected to remain elevated on a year ago basis given the relatively tight COE supply", the central bank added.

The MAS expected the Core Inflation to ease gradually in the second half of this year, as weak global commodity markets has relieved the pressure on the prices of domestic commodity-related items.

The central bank kept its forecast of the CPI inflation of 3.5- 4.5 percent, while the MAS Core Inflation is expected to be in the range of 2.5-3 percent.