Singapore consumer prices fall for 14th straight month and 0.5% for 2015

Shoppers browsing in the fruit section of NTUC FairPrice Xtra at Serangoon NEX mall.
Shoppers browsing in the fruit section of NTUC FairPrice Xtra at Serangoon NEX mall.PHOTO: LIM YAOHUI FOR THE STRAITS TIMES

SINGAPORE - Singapore's all-items consumer price index fell as expected for the 14th straight month in December, but the pace of decline eased slightly mainly due to a stronger pickup in the cost of petrol and overall price of services.

The 0.6 per cent year-on-year dip in CPI was less than the 0.8 per cent decline seen in November and the 0.7 per cent fall forecast by economists in a Reuters poll.

For the whole of 2015, all-items consumer prices declined 0.5 per cent from a 1 per cent increase in 2014, on falling housing and transport costs.

Against a backdrop of low inflation, plunging oil prices and tepid global growth, there has been speculation that the Monetary Authority of Singapore (MAS) will move to ease the Singapore dollar at its next policy review in April.

MAS and Ministry of Trade and Industry (MTI), which released the figures in a joint statement on Monday (Jan 25), said there was "significant uncertainty" over the outlook for global oil prices for this year and they would "continue to closely monitor the developments in global oil prices and assess their impact on domestic inflation."

"At this stage, the forecasts for CPI-All Items inflation and MAS Core Inflation for 2016 remain at -0.5-0.5 per cent and 0.5-1.5 per cent respectively," MAS and MTI said.

MAS core inflation, which excludes the costs of accommodation and private road transport, rose to 0.3 per cent in December from 0.2 per cent a month ago, on account of higher services inflation. Economists had expected this figure to hold steady.

For the whole of 2015, MAS core inflation fell sharply to 0.5 per cent from 1.9 per cent for 2014.

For December, private road transport cost fell by 1.1 per cent, moderating from the 1.7 per cent decline in November. Petrol pump prices rose at a faster pace on a year-ago basis in December, owing to the relatively low base in the same period last year. This more than offset the larger drop in car prices seen in December amid weaker Certificate of Entitlement (COE) premiums.

Accommodation cost was 3.0 per cent lower in December, similar to the decline in the previous month, reflecting the soft housing rental market. Housing costs have fallen following several rounds of property market cooling measures adopted since 2009.

Overall services inflation picked up to 0.9 per cent in December from 0.7 per cent a month earlier, due to a faster pace of increase in holiday travel expenses and a smaller decline in telecommunication services fees.

Food inflation edged down to 1.5 per cent from 1.6 per cent a month ago, as increases in the prices of prepared meals (such as hawker food) moderated.