SINGAPORE: Consumer prices fell further in September, marking the 23rd straight month of decline, according to data released by the Department of Statistics on Monday (Oct 24).
The consumer price index (CPI) fell 0.2 per cent last month, compared to 0.3 per cent the month before, which mainly reflected the smaller decline in private road transport costs and, to a lesser extent, higher food inflation, the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) said in a joint statement.
Private road transport costs fell by 0.4 per cent, moderating from the 1 per cent decline the previous month, largely due to a smaller drop in petrol prices.
Accommodation costs went down 3.7 per cent, continuing on from August's 3.6 per cent drop, amid continued softness in the housing rental market.
Food prices rose 2.2 per cent in September, up from August's 2 per cent, due to a steeper rise in the cost of non-cooked food. Price increases for prepared meals remained stable though, the press release said.
Services inflation was 1.5 per cent, from 1.7 per cent the month before. This reflected a fall in public road transport cost, in addition to a smaller increase in telecommunication services fees, with the slower pace of increase largely due to the discounts offered during the various consumer electronic fairs held that month.
Core inflation, which excludes the costs of accommodation and private road transport, fell slightly to 0.9 per cent from 1 per cent in August, largely due to the lower services inflation which offsets the stronger pickup in food prices, the press release said.
MAS and MTI said they expect core inflation to average 1 per cent this year, before rising to 1 to 2 per cent next year, driven by energy-related costs.
However, ANZ Bank economist Weiwen Ng said he disagrees and expects core inflation to remain subdued, because of the weak growth outlook and soft property market. He added that inflation has bottomed out and he expects inflation to increase. He warned that the cost of driving might also rise.
"I think, going forward, what people can look out for is petrol prices, given that oil prices have been hovering above US$50, compared to US$30 at the start of this year," said Mr Ng.
"So, definitely, higher petrol prices will come into play. And other administrative measures such as the higher carpark charges, expiry of the rebates, I think all these will come into play."