Singapore’s consumer prices rise for first time in 2 years

After a record two years of negative inflation, consumer prices in Singapore finally rose in December last year, with headline inflation coming in at 0.2 per cent.

The rise in the consumer price index (CPI) was due to a larger increase in private road transport cost, which rose by 1.7 per cent in December following a 0.2 per cent rise in November. The rise was the result of higher petrol prices and car park fees, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on Monday (Jan 23).

Services inflation edged up to 1.6 per cent from 1.5 per cent in November, mainly due to a faster pace of increase in holiday expenses, which more than offset the larger contraction in telecommunication services fees.

Food inflation was 2 per cent, unchanged from the previous month. Accommodation costs fell by 3.8 per cent in December, similar to the previous month, reflecting continued softness in the housing rental market, MAS and MTI said.

Overall retail goods inflation eased to zero per cent in December from 0.2 per cent in November, largely on account of a fall in the prices of personal care products.

December’s increase comes after the headline consumer price index stayed flat in November from a year earlier, coming off a deflationary trend for the first time in two years.

For the whole of 2016, headline inflation came in at -0.5 per cent for the second consecutive year.

Core inflation, which excludes the cost of accommodation and private road transport, was slightly lower at 1.2 per cent compared to 1.3 per cent in November. The decline was mainly due to a fall in retail goods inflation more than offsetting an increase in services inflation, MAS and MTI said.

For the whole of 2016, core inflation rose to 0.9 per cent, from 0.5 per cent the year before.