Singapore overall and core inflation ease in November

• Dec 24, 2018

SINGAPORE – Singapore’s headline or overall inflation fell to 0.3 per cent in November, a six-month low, as private transport costs fell again for the fifth consecutive month this year.

After staying at 0.7 per cent for three straight months, the consumer price index (CPI), which measures the cost increase of all items, eased on the back of a smaller increase in services costs, electricity and gas, and retail items, offsetting a slower pace of decline in accommodation costs.

Core inflation, which strips out accommodation and private transport costs, also slowed, to 1.7 per cent from 1.9 per cent in October, a joint release from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) on Monday (Dec 24) showed.

Both overall and core inflation came in under economists’ expectations of 0.6 per cent and 1.9 per cent respectively, according to consensus forecasts compiled by Bloomberg.

Private road transport costs fell sharply by 3.6 per cent year on year in November, accelerating from the 0.6 per cent decline in October, owing to a combination of lower car prices, a fall in Certificate of Entitlement premiums and a smaller rise in petrol prices.

The triple whammy of factors led to the steepest decline in this category since July 2016, according to data from the Department of Statistics.

Other consumer categories saw slower inflation in November compared to October.

Services inflation eased to 1.2 per cent compared to 1.4 per cent previously, due to a decline in telecommunication services fees and a slower pace of increase in holiday expenses.

Retail items inflation came in at 1.1 per cent, moderating from the 1.3 per cent in October, as the cost of telecommunication equipment, clothing and footwear items, household durables and medical products rose at a slower pace.

The cost of electricity and gas increased at a slower pace of 15.4 per cent, compared to the 16.6 per cent rise in the preceding month, reflecting the phased launch of the open electricity market on electricity prices.

Food inflation was unchanged from October, coming in at 1.4 per cent last month.

Accommodation costs fell by 2.1 per cent, cooling from the 2.5 per cent drop in October. This was because of a more gradual fall in housing rentals, as well as a larger increase in the cost of housing maintenance and repairs.

The MAS and MTI maintained their outlook for 2018 and 2019, tipping core inflation to rise modestly in the months ahead, at 1.5-2 per cent in 2018 and 1.5-2.5 per cent in 2019.

Headline inflation is projected at 0.5 per cent in 2018 before picking up to 1-2 per cent in 2019, said the MAS and MTI.

Source: https://www.straitstimes.com/business/economy/singapore-overall-and-core-inflation-ease-in-november