Singapore Inflation Rate Eases Further in July
Singapore’s annual inflation rate eased to 1.2 percent in July of 2014 from 1.8 percent in June, mainly due to lower private road transport costs, and below market forecasts.
8/25/2014 8:48:52 AM
Private road transport cost fell by 1.6 percent in July, following a 2.8 percent increase in June, reflecting the high base last year when COE (certificate of entitlement) premiums surged, while petrol pump prices also rose at a slower pace of 3.1 percent, compared to 6.4 percent a month ago. Accommodation costs was largely unchanged, after edging up by 0.5 percent in the previous month, given the soft housing rental market. Food inflation eased to 3.0 percent from 3.2 percent a month ago, on account of a more moderate rise in the prices of non-cooked food items and prepared meals. Services inflation was higher at 2.5 percent, compared to 2.2 percent in the preceding month, led by stronger increases in pre-school fees, medical treatment cost and holiday travel expenses. For the rest of 2014, inflation is projected to ease between 1.5 to 2 percent due to lower contributions from imputed rental on OOA (owner-occupied accommodation) and car prices.
MAS Core inflation, which excludes the costs of accommodation and private road transports, inched up to 2.2 percent in July from 2.1 percent in the preceding month, due to the pickup in service inflation. For 2014, MAS Core inflation is expected to stay elevated at 2-3 percent due to relatively benign external price development coupled with ample supplies in the major commodity markets and modest inflation in most of Singapore’s key imports source countries.
On a month-on-month basis, the CPI declined 0.3 percent in July after a 0.7 percent fall in June mostly due to higher accommodation costs and private road transport amid tepid increase of food prices and services.