Singapore consumer prices decline for 17th straight month with 1% drop in March

Shoppers perusing through products on the shelves of Mustafa Centre's supermarket.
Shoppers perusing through products on the shelves of Mustafa Centre's supermarket.PHOTO: ST FILE

SINGAPORE - Inflation stayed in negative territory last month, the 17th straight month of declining prices.

Consumer prices fell 1.0 per cent in March from the same period a year ago, due mainly to the continued fall in private road transport costs. The headline number was in line with the median expectation for a 1.0 per cent fall tipped by 20 private sector economists in a Bloomberg poll.

Last month's fall in prices follows a 0.8 per cent decline in February, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on Monday (April 25).

Private road transport cost fell at a faster pace of 5.9 per cent in March from the same period a year ago, led by lower petrol pump prices and lower Certificate of Entitlement (COE) premiums for car purchases. In February, private road transport costs had fallen 3.9 per cent.

Core inflation edged up to 0.6 per cent in March from 0.5 per cent in February, due mainly to higher food inflation. The core inflation measure strips out accommodation and private road transport costs to better gauge everyday expenses.

The MAS on Monday reiterated that it expects headline inflation to remain negative throughout the year, and average -1.0 and zero per cent. The MAS also maintained that core inflation would come in within the lower half of the 0.5 per cent to 1.5 per cent forecast range this year, after lowering its core inflation guidance on April 14.

During a scheduled policy review on April 14, MAS surprised market-watchers by taking the Singapore dollar off the path of modest and gradual appreciation, to prevent the local currency from rising further against a basket of key currencies. A weaker inflation outlook had forced the MAS to tweak the Singdollar's path.

The MAS said in a statement on Monday: "External sources of inflation are likely to remain muted given ample supply buffers in the major commodity markets and weak global demand conditions."