SINGAPORE - The overall drop of 0.4 per cent from the previous year was sharper than the 0.3 per cent decline analysts had predicted. It was also the biggest decrease since December 2009, according to Bloomberg data.
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Here is the media release from the Monetary Authority of Singapore and the Ministry of Trade and Industry:
Consumer Price Developments in January 2015
CPI-All Items inflation came in at -0.4 per cent y-o-y in January
CPI-All Items inflation eased to -0.4 per cent in January from -0.1 per cent in December 2014, mainly on account of sharper price declines in direct oil-related items as well as lower food and services inflation.
Prices of direct oil-related items were 13.6 per cent lower in January, after falling by 7.4 per cent in the preceding month, as petrol pump prices and electricity tariffs were cut further following the correction in global oil prices.
Food inflation moderated to 2.2 per cent from 2.7 per cent in December 2014, as a result of the high base in January 2014 when food prices rose significantly during the Chinese New Year festive period.
Overall services inflation slowed to 1.2 per cent from 1.7 per cent in December, reflecting the impact of enhanced subsidies for medication in polyclinics and Specialist Outpatient Clinics.
Meanwhile, domestic services and refuse collection services saw a pick-up in price increases.
Accommodation cost was 1.9 per cent lower, extending the 1.7 per cent decline in the previous month, given the soft housing rental market.
Private road transport cost fell by 5.0 per cent, compared to the 5.3 per cent drop in December 2014, owing to a smaller correction in car prices.
CPI less imputed rentals on owner-occupied accommodation (CPI-ex OOA) rose by 0.1 per cent in January
Inflation as measured by CPI less imputed rentals on owner-occupied accommodation (OOA) eased to 0.1 per cent in January from 0.4 per cent in December, on account of the sharper price declines in direct oil-related items and more moderate price increases of food and services.
MAS Core Inflation slowed to 1.0 per cent in January
MAS Core Inflation, which excludes the costs of accommodation and private road transport, came in at 1.0 per cent in January compared to 1.5 per cent in December, due to the cut in electricity tariffs as well as the fall in food and services inflation.
On a month-on-month basis, CPI-All Items fell by 0.2 per cent in January, following the 0.1 per cent decline in December. MAS Core Inflation was -0.2 per cent compared to 0.2 per cent in the previous month.
MONTH-ON-MONTH CHANGES IN KEY CPI CATEGORIES
Electricity, LPG & Gas
Electricity tariffs and the price of liquefied petroleum gas were 7.9 per cent and 4.3 per cent lower respectively, on account of the fall in global oil prices.
Overall services fees declined by 0.1 per cent. Cheaper air tickets, overseas travel packages and outpatient medical treatment were partly offset by the increase in domestic refuse removal charges and education fees.
Food prices rose by 0.5 per cent due to more costly restaurant meals, hawker food and non-cooked food items, such as seafood and fresh vegetables.
Private Road Transport
Private road transport cost declined by 0.7 per cent as the correction in petrol pump prices more than offset the increase in car prices and ERP charges.
Accommodation cost fell by 0.2 per cent, given lower rentals amid the soft housing market.
External price developments are expected to be generally benign, given ample supply buffers in the major commodity markets. Global oil prices are unlikely to show a significant rebound from current levels and should remain much lower for the whole of 2015 than the US$93 average recorded last year.
Domestic food inflation could, however, continue to be elevated in the near term, due to higher prices of regional food supplies.
At the same time, while domestic cost pressures will remain, the extent to which businesses will pass on accumulated costs to consumer prices could be constrained in the near term by the moderate economic growth environment.
Car prices and imputed rentals on owner-occupied accommodation will also continue to dampen overall inflationary pressures amid the expected increase in the supply of COEs and newly-completed housing units.
MAS Core Inflation and CPI-All Items inflation could ease further, before rising in the second half of 2015 on account of some recovery in global oil prices and in view of the base effects associated with the low inflation in Q4 2014.
The rebasing of the CPI has not impacted the 2015 forecasts, which remain at -0.5-0.5 per cent and 0.5-1.5 per cent for CPI-All Items inflation and MAS Core Inflation respectively.