- POSTED: 23 Jan 2014 13:16
Singapore's headline inflation eased in December due mainly to lower private road transport cost.
SINGAPORE: Singapore's headline inflation rose 1.5 per cent in December from a year earlier, easing from an eight-month high of 2.6 per cent in November.
This was due mainly to lower private road transport cost, which declined 2.8 per cent in December on account of lower COE premiums, compared to a 3.4 per cent jump in November.
The December decline also came from a high base in COE premiums a year ago as premiums had surged in December 2012.
Accommodation cost rose 2.9 per cent, lower than the 3.3 per cent increase in the previous month, as housing rentals edged up at a slower pace compared to a year ago.
Food inflation inched up to 2.7 per cent in December from 2.6 per cent a month ago.
Services inflation was stable at 2.8 per cent in December.
For 2013, Singapore's headline inflation averaged 2.4 per cent, sharply lower than 4.6 per cent in 2012.
MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased to 2.0 per cent in December. This was due to cheaper retail items like clothing and footwear.
For the full year, MAS Core Inflation came in at 1.7 per cent, compared to 2.5 per cent in 2012.
Looking ahead, an analyst said January inflation is expected to spike.
"We'll probably have some of the Chinese New Year price increases start to come through. We've seen some of those coming through already in December, with seafood prices climbing 5.3 per cent year-on-year," said ANZ economist Daniel Wilson.
In a statement, the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) expect both MAS Core Inflation and CPI-All Items inflation to come in at 2 per cent and 3 per cent in 2014.
Economists say wage increases will be a significant contributor to inflation over the year.
For example, foreign worker levies will go up in July, and in September, basic wage levels will be implemented for cleaners.
Wages grew 4 to 5 per cent in 2013 and is expected to show similar growth this year.