Singapore consumer prices post biggest drop in 5 years

Consumer prices in the Republic fell 0.8 per cent in August, the biggest year-on-year drop since November 2009.

The decline, which came after a 0.4 per cent fall in July, was mainly due to the lower cost of private road transport, according to a joint news release from the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) on Wednesday (Sep 23).

The cost of private road transport fell by 2.9 per cent in August after a decline of 0.1 per cent in July, as a result of the high base a year ago when Certificate of Entitlement (COE) premiums for cars saw a sharp increase, as well as a one-year road tax rebates for petrol vehicles.

Accommodation cost declined by 2.9 per cent following the 2.8 per cent drop in the previous month, reflecting the continued softening of the housing rental market, MTI and MAS said.

Services inflation edged down to 0.5 per cent from 0.6 per cent in July, while the cost of retail items fell by 0.6 per cent, mainly due to lower clothing and footwear prices. Food inflation was 1.9 per cent, unchanged from the previous month.

Core inflation, which excludes the cost of accommodation and private road transport, fell to 0.2 per cent from 0.4 per cent in July, reflecting lower services and retail goods inflation, the news release said.

“MAS Core Inflation and CPI-All Items inflation could rise towards the end of the year and are expected to pick up further in 2016, as the effects of the budgetary measures and the drag from the past fall in global oil prices dissipate on a year-ago basis,” it said.

For 2015 as a whole, core inflation and CPI are projected to come in at the lower half of the forecast range of 0.5 to 1.5 per cent and -0.5 to 0.5 per cent, respectively.