Consumer prices fall for 21st straight month in July
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Consumer prices fell further in July, marking the 21st straight month of decline, according to data released by the Department of Statistics on Tuesday (Aug 23).
The consumer price index (CPI) fell 0.7 per cent last month, unchanged from the previous month, as a smaller decline in the cost of private road transport offset the impact of lower retail goods prices, the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) said in a joint statement.
Private road transport costs fell by 4.4 per cent, compared to the 5.7 per cent decrease a month earlier, largely due to a smaller decline in car prices from a year ago.
Prices of retail goods fell 0.2 per cent, compared to an increase of 0.5 per cent in June. This was mainly because of steeper discounts on clothing and footwear during the Great Singapore Sale, MAS and MTI said.
Services inflation was 1.6 per cent, unchanged from the previous month. While the cost of education services rose more sharply, this was offset by a slower pace of increase in holiday travel expenses.
Food prices rose 2.1 per cent in July. Although there was a stronger pickup in the cost of non-cooked food items, it was offset by a smaller increase in the price of restaurant food.
The cost of electricity, liquefied petroleum gas and gas fell by 12.7 per cent, compared to the 13.7 per cent decline in June. This was due to a smaller decrease in electricity tariffs on a year-ago basis, the agencies said.
Core Inflation, which excludes the costs of accommodation and private road transport, fell slightly to 1 per cent from 1.1 per cent in June, due to the fall in retail goods prices.
Ms Selena Ling, Head of Treasury and Strategy at OCBC Bank, said that the main drags on inflation were familiar.
“Looking ahead, with headline inflation having likely troughed in the second quarter and likely to creep higher in the coming months, we maintain our full-year inflation forecast of -0.4 percent year-on-year,” she said.
Questions & Answers
Q.What was the main reason for the overall fall in consumer prices in July?
What was the main reason for the overall fall in consumer prices in July?
The overall fall was due to a smaller decline in private road transport costs and lower retail goods prices. These factors combined to keep the consumer price index down, despite some increases in other sectors.
Q.Which specific retail items contributed most to the fall in retail goods prices?
Which specific retail items contributed most to the fall in retail goods prices?
Retail goods prices fell mainly because of steeper discounts offered on clothing and footwear. These reductions were observed during the period of the Great Singapore Sale.
Q.Why did private road transport costs see a smaller decrease compared to the previous month?
Why did private road transport costs see a smaller decrease compared to the previous month?
The smaller decrease in private road transport costs was largely attributed to a less significant decline in car prices when compared to the same period in the previous year.
Q.What components are excluded when calculating Core Inflation?
What components are excluded when calculating Core Inflation?
Core Inflation is calculated by excluding the costs associated with accommodation and private road transport. This allows for a focus on price changes in other essential goods and services.