Singapore inflation remains at 0.4% in October

Singapore inflation remains at 0.4% in October

Office workers at Raffles Place (1)
File photo of office workers at Raffles Place. (Photo: TODAY)

SINGAPORE: Headline inflation remained flat at 0.4 per cent on a year-on-year basis for the third consecutive month in October, as higher food and private road transport prices offset a steeper decline in housing costs and a smaller increase in utility prices.

Core inflation, which excludes accommodation and private road transport costs, also remained unchanged from the previous month at 1.5 per cent, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said in a joint press release on Thursday (Nov 23).

Across the sectors, prices in all categories were higher year-on-year apart from housing and utilities, which fell 2.7 per cent from a year ago.

Food inflation rose to 1.5 per cent in October from 1.2 per cent a month earlier, reflecting a larger increase in the prices of non-cooked food items and - to a lesser extent - prepared meals, said MAS and MTI.

Private road transport inflation edged up to 2.2 per cent in October from 2.1 per cent in the previous month, on the back of a smaller drop in car prices, the joint release added.

The cost of electricity and gas rose by 6.6 per cent in October, lower than the 7.6 per cent increase in the previous month as electricity tariffs fell following a decline in global oil prices in the preceding months.

Accommodation costs fell by 4.2 per cent in October, steeper than the 3.9 per cent decline registered in the previous month, due to a larger quantum of service and conservancy charges rebates disbursed compared to the same time last year.

Services inflation was stable at 1.5 per cent in October, with a larger increase in holiday expenses and recreational and cultural services fees offset by a smaller rise in the cost of medical and dental treatment and telecommunications services fees.

MAS and MTI said in their statement that imported inflation is likely to rise mildly on the external front, as global demand improves amid ample supply in key commodity markets.

At home, cost pressures in the economy should remain relatively restrained, it added.

"Although labour market conditions have improved recently, the gradual absorption of previously accumulated slack will temper wage pressures in the near term. Meanwhile, other non-labour costs such as commercial and retail rentals continue to be subdued," MAS and MTI said.

According to official estimates, MAS core inflation is expected to be around 1.5 per cent this year and average 1 to 2 per cent in 2018, while CPI-All Items inflation is projected to come in at around 0.5 per cent this year, and stay in the range of 0 to 1 per cent next year.

Source: CNA/am/nc