SINGAPORE: Singapore's core inflation eased to 1.7 per cent year-on-year in January from 1.9 per cent the previous month, according to the latest figures released on Monday (Feb 25).
This mainly reflected a slower pace of increase in the cost of electricity and gas, which outweighed higher services inflation, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) in a press release.
AdvertisementThe core inflation measure excludes changes in the price of cars and accommodation.
Headline inflation came in at 0.4 per cent, compared to 0.5 per cent in December, as a smaller rise in the cost of electricity and gas was offset by the stronger pickup in the cost of services.
The overall cost of retail items rose by 1.4 per cent in January, easing from the 1.7 per cent increase in December.
This mostly reflected a steeper decline in the prices of telecommunication equipment and recreation and entertainment goods, as well as a slower pace of increase in the prices of household durables & supplies.
AdvertisementAdvertisementIn January, food inflation came in at 1.4 per cent, unchanged from December, as price increases for both non-cooked food items and prepared meals remained broadly the same.
The cost of electricity and gas rose at a slower pace of 6.5 per cent year-on-year, compared to the 14.6 per cent increase in December.
This was largely due to a downward revision in electricity tariffs given lower oil prices in the preceding months, as well as the effect of the phased nationwide launch of the Open Electricity Market (OEM) on electricity prices.
Services inflation picked up to 1.7 per cent from the previous 1.5 per cent mainly on account of an increase in public transport fares, which outweighed a smaller rise in holiday expenses.
Accommodation costs fell by 1.9 per cent, the same pace of decline as the previous month, as a more gradual fall in housing rentals offset a smaller rise in the cost of housing maintenance & repairs.
Private road transport costs slipped 3.4 per cent, a moderation from the 3.7 per cent fall in December, as the pace of reduction in car prices eased and more than offset lower petrol prices.
Looking ahead, MAS and MTI said that global oil prices are expected to be lower this year compared to 2018 due to oversupply concerns.
“On the domestic front, supportive labour market conditions should underpin wage growth and continuing price pressures," they said.
"However, the extent of overall price increases will be capped by greater market competition in several consumer segments, such as telecommunications, electricity and retail,” they added.
MAS expects core inflation to remain unchanged in the months ahead at the forecast range of 1.5 per cent to 2.5 per cent.
Given the sharp decline in global oil prices in recent months, headline inflation has been revised down to 0.5 per cent to 1.5 per cent.
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