Singapore’s consumer prices improves slightly in September

Singapore’s consumer price index (CPI) came in at -0.6 percent year on year in September, slightly improved from the 0.8 percent fall in August, largely on account of a stronger pickup in the prices of consumer services and retail items, a joint press release by the Ministry of Trade and Industry (MTI) and the Monetary of Authority of Singapore (MAS)said Friday.

Services inflation rose to 0.8 percent in September from 0.5 percent in the previous month. This mainly reflected the rise in healthcare services fees and public road transport cost, as the dampening effects of enhanced medical subsidies and SG50-related price promotions dissipated.

The overall price of retail items was 0.6 percent higher, reversing the 0.6 percent drop in the preceding month, largely due to more costly clothing and footwear and household durables.

Food inflation edged down to 1.8 percent from 1.9 percent a month earlier, as the increase in the cost of prepared meals moderated slightly.

Private road transport cost decreased by 3.2 percent, extending the 2.9 percent fall in August, owing to lower Certificate of Entitlement (COE) premiums and petrol pump prices.

The MAS Core Inflation, which excludes the costs of accommodation and private road transport, increased to 0.6 percent from 0.2 percent in August. This mainly reflected the stronger pickup in the prices of services and retail items, MAS and MTI explained.

Looking forward, the MAS said external sources of inflation are likely to stay generally benign, given ample supply buffers in the major commodity markets and weak global demand conditions.

For the full year, core inflation is expected to come in at 0.5 to 1.5 percent in 2016, compared to around 0.5 percent in 2015, said MAS and MTI.

CPI-All Items inflation could continue to be dampened by lower car prices and imputed rentals on owner-occupied accommodation, amid an expected increase in the supply of COEs and newly-completed housing units.

Therefore, MAS expects it to be between -0.5 to 0.5 percent in 2016, compared to around -0.5 percent this year.