Consumer prices down for 8th month

Singapore consumer prices saw the eighth consecutive month of year-on-year declines, figures from the Department of Statistics showed yesterday.

The all-items consumer price index (CPI) dropped 0.3 per cent last month, in line with the median forecast in a Reuters survey of economists.

But it was less than the 0.4 per cent decline recorded in May and April's 0.5 per cent drop. This was mainly on account of larger increases in the costs of services, food and private road transport, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI).

Headline CPI has been falling since November, due to a slide in global oil prices in the second half of last year, as well as falls in housing rents and private road transport costs. Budget measures to help Singapore households were also a factor.

Last month, accommodation costs dropped 2.6 per cent, but private road transport costs rose 1.2 per cent. Food prices were up 2 per cent and services inflation was 0.5 per cent last month, on the back of higher costs of hotel stays and telecommunication services.

Core inflation, which excludes the costs of accommodation and private road transport, came in at 0.2 per cent last month, up from 0.1 per cent in May. On a monthly basis, consumer prices dropped 0.1 per cent last month, from a 0.5 per cent rise in May.

MAS and MTI said core inflation is expected to remain subdued, at around the current rate, in the next few months. But headline inflation could ease further, given the dampening effects of car prices and imputed rentals on owner-occupied accommodation.

MAS core inflation and CPI-all items inflation could subsequently rise towards the end of the year and next year, due to higher global oil prices and as the effects of the budgetary measures dissipate, they said.

MAS had said on Tuesday that Singapore is not facing deflation despite the extended period of negative inflation rates.

This article by The Straits Times was published in MyPaper, a free, bilingual newspaper published by Singapore Press Holdings.

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