Singapore Consumer Prices Drop for 15th Month


Singapore consumer prices fell by 0.6 percent year-on-year in January of 2016, the same pace as in the preceding month and missing market consensus. It is the 15th straight month of fall, as cost declined further for housing & utilities and transport while prices of food rose at a faster pace than in a month earlier.

Year-on-year, downward prices pressure came from: housing & utilities (-4.0 percent in January 2016 from -4.2 percent in December 2015, largely due to a 10.9 percent drop in fuel & utilities and a 3.1 percent fall in accommodation) and household durables & services (-1.4 percent from -1.3 percent, mainly due to a  2.2 percent decline in household services & supplies). Cost also dropped for transport (-1.5 percent from -0.9 percent, due to a 1.8 percent decline in private road transport and a 5.6 percent fall in other travel & transport)and communication (-0.7 percent from -0.1 percent). In contrast, upward prices pressures came from:  clothing & footwear (+2.6 percent from +1.2 percent) and health care (+0.7 percent from -0.7 percent, mainly due to a 0.9 percent rise in medical & dental treatment and a 0.2 percent increase in medical products, appliances & equipment). Prices also increased for recreation & culture (+0.8 percent from +1.4 percent, mainly due to a 1.0 percent increase in holiday expenses; a 0.8 percent rise in recreation & entertainment and a 0.2 percent rise in newspapers, book & stationery) and miscellaneous goods & services (+0.3 percent, after remaining unchanged in December) and education (+2.6 percent from +3.7 percent).

Prices of food rose 1.7 percent in January, up from a 1.5 percent rise in a month earlier. Among food, cost of food excluding food servicing services increased by 1.5 percent, following a 0.5 percent rise in the preceding month while food servicing services rose 1.8 percent, after a 2.1 percent rise in December. Among food excluding food servicing services, prices increased  for bread & cereals (+0.7 percent); meat (+2.2 percent); fish & seafood (+4.2 percent); fruits (+3.4 percent); milk, cheese & eggs (+0.6 percent); sugar, preserves & confectionery (+2.4 percent) and other food (+1.3 percent). In contrast, prices declined for oils & fats (-0.5 percent) and vegetables (-1.6 percent) and non-alcoholic beverages (-0.3 percent). Among food servicing services, prices  increased for all categories: restaurant foods (+2.8 percent), fast food (+0.2 percent), hawker food including food courts (+1.5 percent) and catered food (+0.1 percent).

Core inflation, which excludes costs of accommodation and private road transport, rose 0.4 percent year-on-year, accelerating from a 0.3 percent rise in December 2015 and in line with market expectations.  It is the highest figure since September 2015. 

On a month-on-month basis, consumer prices dropped by 0.2 percent rise in January 2016, after remaining unchanged in a month earlier. 

For 2016, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) revised down their inflation outlook to a range of -1.0 percent to 0.0 percent from  earlier projections of -0.5 percent to 0.5 percent. 

MAS core inflation forecast for 2016 was kept unchanged between 0.5 percent to 1.5 percent, reflecting the smaller weight of oil-related items and the exclusion of private road transport costs. Core Inflation is still expected to pick up gradually over the course of 2016, as the disinflationary effects of oil as well as budgetary and other one-off measures ease. 

Singapore Consumer Prices Drop for 15th Month


Statistics Singapore l Rida Husna | rida@tradingeconomics.com
2/23/2016 6:44:14 AM