Singapore consumer prices rise in January for first time in nearly a year
HEADLINE inflation returned to positive territory in the new year, with all-items consumer prices in Singapore rising 0.2 per cent year on year as car costs and rentals went up.
The increase in prices, which was in line with private economists’ estimates in a Bloomberg poll, was the first reading above zero since last February.
Core inflation – a key central bank gauge for monetary policy – was still negative at -0.2 per cent, a slight uptick from -0.3 per cent in December.
But core inflation is still tipped to “turn mildly positive this year”, partly on an anticipated year-on-year rise in oil prices, the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) reiterated in a joint statement on Tuesday.
They singled out the continued rise in Brent crude oil prices since the last three months of 2020, which has been fuelled by output cuts from the Opec+ bloc.
The official outlook remains for core inflation to average between zero and 1 per cent in 2021, with all-items inflation between -0.5 per cent and 0.5 per cent.
Headline inflation was lifted by an increase in car prices and a milder fall in petrol prices. These changes pushed private transport costs higher by 1.9 per cent year on year in January, expanding from 1.2 per cent the month before.
Meanwhile, accommodation expenses grew by 0.5 per cent in January, widening from 0.3 per cent before, on a faster increase in rents. The MTI and MAS attributed the pick-up to the end of temporary rental rebates for households in public rental flats.
The MTI and MAS noted: “Accommodation costs have stabilised, with housing rents in some areas registering increases. In addition, private transport costs have risen on the back of firm demand for cars and higher petrol costs.”
But core inflation, which strips out the costs of private road transport and accommodation, was weakened by declining expenses in other areas.
Electricity and gas costs fell by 9.7 per cent year on year in January, widening from a 6.7 per cent drop in the previous month, on a downward revision to the electricity tariff.
The cost of retail and other goods also fell at a steeper pace, declining by 1.3 per cent in January against 1.2 per cent before. This was attributed to larger decreases in the prices of personal care products, as well as clothes and shoes.
Meanwhile, food inflation dipped to 1.5 per cent, from 1.6 per cent last December, on a slower increase in the prices of non-cooked food and restaurant meals. That’s even as services inflation moderated to -0.3 per cent in January, from -0.8 per cent previously, on the back of higher tuition and other fees, as well as point-to-point transport services costs.