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Singapore core inflation rises to 1.9% year-on-year in December

Singapore core inflation rises to 1.9% year-on-year in December

A view of the financial district skyline in Singapore. (Photo: AFP)

SINGAPORE: Singapore's core inflation rose to 1.9 per cent year-on-year in December last year from 1.7 per cent in the previous month, according to the latest figures released on Wednesday (Jan 23).

This was mainly due to larger increases in the cost of services and retail items, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) in a press release.

The core inflation measure excludes changes in the price of cars and accommodation.

Headline inflation rose to 0.5 per cent year-on-year in December, from 0.3 per cent in November, reflecting higher inflation for services and retail items, as well as a smaller decline in accommodation costs.

For the whole of 2018, core inflation rose to 1.7 per cent from 1.5 per cent in the year before. Headline inflation for the year came in at 0.4 per cent, lower than the 0.6 per cent recorded in 2017.

Services inflation increased to 1.5 per cent year-on-year in December, from 1.2 per cent in the previous month. 

This was due to a stronger pick-up in holiday expenses and airfares, as well as a smaller decline in telecommunication services fees, said MAS and MTI.

The overall cost of retail items rose by 1.7 per cent year-on-year, faster than the 1.1 per cent increase in November. 

This was mainly because of larger increases in the prices of clothing and footwear and household durables.

Food inflation was 1.4 per cent, unchanged from the preceding two months, as price increases for both non-cooked food items and prepared meals remained broadly the same.

The cost of electricity and gas rose by 14.6 per cent year-on-year, lower than the 15.4 per cent increase in November.

The lower rate of inflation was due to the effect of the phased nationwide launch of the Open Electricity Market on electricity prices, said MAS and MTI.

Private road transport costs fell by 3.7 per cent year-on-year in December, slightly faster than the 3.6 per cent decline in the previous month.

The two agencies said that this was because even though the fall in car prices moderated in December, its effect was more than offset by a slower pace of increase in petrol prices.

Accommodation costs decreased by 1.9 per cent year-on-year in December, moderating from the 2.1 per cent decline in November, due to a more gradual fall in housing rentals.

Looking ahead, MAS and MTI said core inflation is expected to come within the forecast range of 1.5 to 2.5 per cent in 2019. Headline inflation is projected to pick up to 1 to 2 per cent in 2019, as the overall drag from accommodation and private road transport costs lessens.

Source: CNA/nc(hm)


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