Singapore Deflation Deepest in Nearly 30 Years


Singapore consumer prices fell 1.6 percent year-on-year in May of 2016, following a 0.5 percent drop in April and missing market estimates of a 0.8 percent decline. It was the 19th straight month of fall and the sharpest decline since August 1986. In May, while cost of housing & utilities and transport decreased further, prices of food eased.

Year-on-year, downward prices pressure came from: housing & utilities (-6.4 percent in May from -1.9 percent in April, largely due to a 9.5 percent drop in fuel & utilities and a 6.0 percent fall in accommodation) and clothing & footwear (-0.3 percent from +1.8 percent). Cost also declined for: transport (-5.7 percent from -5.4 percent, due to a 7.6 percent decline in private road transport, a 0.8 percent fall in other travel & transport and a 0.6 percent in public road transport) and communication (-0.1 percent from -1.9 percent). In contrast, upward prices pressure came from: household durables & services (+3.3 percent from +0.2 percent, mainly due to a 1.2 percent rise in household durables and a 4.6 percent increase in household services & supplies),  health care (+1.0 percent from +1.1 percent, mainly due to a 1.2 percent rise in medical & dental treatment and a 0.4 percent rise in medical products, appliances & equipment), recreation & culture (+1.1 percent from +1.0 percent, mainly due to a 6.1 percent increase in newspapers, book & stationery, a 1.4 percent in holiday expenses and a 0.2 percent rise in recreation & entertainment), education (+3.2 percent from +3.1 percent, mostly due to a 3.3 percent increase in tuition & other fees) and miscellaneous goods & services (+0.2 percent from +0.6 percent, mainly due to a 0.7 percent rise in personal effects, a 0.2 percent growth in other miscellaneous expenditure and a 0.3 percent rise in personal care).

Prices of food rose 2.2 percent in May, down from a 2.3 percent rise in a month earlier. Among food, cost of food excluding food servicing services increased by 2.5 percent, following a 2.6 percent rise in the preceding month while food servicing services rose 2.0 percent, after a 2.2 percent rise in March. Among food excluding food servicing services, cost increased for most of components. Prices of bread & cereals rose 1.2 percent; meat (+1.2 percent); fish & seafood (+5.0 percent); fruits (+3.6 percent); milk, cheese & eggs (+2.5 percent), vegetables (+5.1 percent); sugar, preserves & confectionery (+0.8 percent), non-alcoholic beverages (+0.2 percent)  and other food (+1.7 percent). In contrast, prices declined by 1.8 percent for oils & fats. Among food servicing services, prices increased for all categories: restaurant foods (+2.4 percent), fast food (+2.9 percent), hawker food including food courts (+1.6 percent) and catered food (+0.8 percent).

Core inflation, which excludes costs of accommodation and private road transport, rose 1.0 percent year-on-year from 0.8 percent in April but below market expectations of 1.2 percent. It was the highest figure since March 2015. 

On a month-on-month basis, consumer prices dropped by 0.7 percent, compared to a 0.1 percent fall in April. Cost declined for: clothing & footwear (-1.5 percent), housing & utilities (-2.7 percent), recreation & culture (-0.1 percent) and miscellaneous goods & services (-0.5 percent). In contrast, prices went up for: household durables & services (+0.1 percent), health care (+0.3 percent) and transport (+0.3 percent). Prices remained unchanged for food and communication.


Singapore Deflation Deepest in Nearly 30 Years


Statistics Singapore l Rida Husna | rida@tradingeconomics.com
6/23/2016 7:42:29 AM