Singapore consumer prices rise for 2nd straight month in January on recovering oil prices

An oil refinery at Pulau Bukom is seen from Labrador Park on Feb 16, 2017.
An oil refinery at Pulau Bukom is seen from Labrador Park on Feb 16, 2017.ST PHOTO: MARK CHEONG

SINGAPORE - Singapore logged its second consecutive month of positive inflation in January, on the back of gradually recovering oil prices

The consumer price index - the main measure of inflation - rose 0.6 per cent last month compared with the same month a year ago, according to figures relased by the Singapore Department of Statistics on Thursday (Feb 23).

This came after a record two-year spell of negative inflation from November 2014 to October last year, and a flat consumer price index in November. Inflation finally turned positive in December, with the index inching up 0.2 per cent.

Lower oil and car prices and falling accommodation costs - partly due to the soft property market - were the main drivers behind that long bout of negative inflation.

January's uptick in consumer prices was due in part to an increase in the cost of oil-related items as well as higher services inflation.

The cost of oil-related items rose 5.9 per cent, following a 0.1 per cent decline in December, reflecting an increase in electricity tariffs as well as a stronger pickup in petrol prices.

Meanwhile, services inflation rose to 1.9 per cent in January from 1.6 per cent a month earlier. This was largely due to higher air fares and telecommunication services.

These increases pushed up core inflation - which strips out accommodation and private road transport costs to better gauge everyday expenses. It came in at 1.5 per cent last month, up slightly from December' 1.2 per cent.

Core inflation is expected to average 1 to 2 per cent this year, compared with 0.9 per cent in 2016, according to estimates from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI).

Overall inflation is projected to pick up to 0.5 to 1.5 per cent this year, from negative 0.5 per cent in 2016. This largely reflects the positive contribution of energy-related components as well as some administrative price increases, MAS and MTI said.