Singapore consumer prices fall in March for fifth straight month, by less-than-expected 0.3%

SINGAPORE - Falling housing rentals and transportation costs once again dragged consumer prices down for a fifth straight month in March, according to official data out Thursday.

Singapore's all-items consumer price index (CPI) fell 0.3 per cent last month from the same period a year ago. The fall was lower than the 0.5 per cent decline predicted by economists in a Reuters poll.

The last time Singapore experienced a prolonged drop in consumer prices - also known as deflation - was in 2009.

"CPI-ex OOA" refers to CPI less imputed rentals on owner-occupied accommodation

Accommodation costs, which carry the heaviest weight in the CPI, fell 2.2 per cent in March, after falling 2.1 per cent the month before, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) in a joint statement.

Private road transport costs fell by a more moderate 4.0 per cent, compared to the 5.8 per cent drop in February, following the increase in petrol duty rates.

Core inflation - which excludes accommodation and private road transport costs and is seen as a better gauge of daily expenses - rose 1 per cent in March from a year ago, lower than the rise of 1.3 per cent in February.

This was as food inflation moderated to 2.1 per cent from 2.5 per cent in February, on account of a slower rise in non-cooked food prices as demand eased after the Chinese New Year.

Services inflation was stable at 1.5 per cent. The sharper increase in telecommunication services fees was offset by a decline in air fares and a smaller pick-up in hospitalisation charges.

Thursday's report comes after MAS' bi-annual policy review on April 14 when the central bank surprised markets by keeping its Singdollar policy unchanged, saying that it expects the economy to grow at a moderate pace and that inflation is likely to remain subdued this year.

This came after MAS made a surprise tweak to its policy in January, acting months ahead of its scheduled meeting to ease the rise of the Singdollar.

ann@sph.com.sg