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Singapore Consumer Price Index Rose 2.4% in August — Update

  • Sep 23, 2021 
By Ronnie Harui

SINGAPORE–Singapore’s consumer prices rose in August, driven by firm increases in the costs of food, housing, transportation and utilities.

The consumer-price index in August climbed 2.4% from a year earlier, the country’s Department of Statistics said Thursday. That compared with the median estimate for a 2.35% rise in a Wall Street Journal survey of 10 economists.

Singapore’s CPI rose 2.5% in July.

The cost of transportation, which has an index weighting of 17.07%, climbed 8.3% in August. Food prices, which have a 21.10% weighting, rose 1.5%, while housing and utilities costs, which make up 24.84% of the index, rose 2.2%, the data showed.

Core CPI, which strips out private road transport and accommodation costs, rose 1.1% in August from a year earlier, following a 1.0% increase in July. The median estimate from a WSJ survey of eight economists was for a 1.0% increase.

External inflation remained elevated but has shown signs of moderating as base effects fade, while upward pressure on global inflation should ease further during the year, the Monetary Authority of Singapore and the Ministry of Trade and Industry said in a joint statement Thursday.

Crude oil prices have fallen recently due to concerns over the prospects of the global economy amid the spread of Covid-19’s Delta variant.

The supply-demand mismatches in some goods markets and bottlenecks in global transportation are mainly transitory and should ease with the gradual recovery in production and logistics services. Continued negative output gaps in some of Singapore’s key trading partners should help to moderate overall import price inflation this year, the MAS and MTI said.

On the domestic front, lingering uncertainty as Singapore transitions to a Covid-resilient country could weigh on consumer sentiment, and hence, dampen domestic price increases in the near term. Wage increases should continue to be restrained as the slack in the labor market, while diminishing, will take time to be fully absorbed, they said.

Commercial rents are expected to stay low, capping overall business cost pressures. In comparison, private transport inflation is likely to remain resilient due to firm demand for cars. Accommodation inflation could continue to pick up over the course of the year on the back of strong demand for rental accommodation, the MAS and MTI said.

Source: https://www.marketwatch.com/story/singapore-consumer-price-index-rose-2-4-in-august-update-271632375275