Singapore's inflation dips to 1.2% in July on lower car costs

Potential buyers at the Nissan showroom in Ubi Road on May 10, 2014. -- PHOTO: ST FILE
Potential buyers at the Nissan showroom in Ubi Road on May 10, 2014. -- PHOTO: ST FILE

SINGAPORE - Lower car prices helped push down Singapore's inflation rate to 1.2 per cent in July from 1.8 per cent the previous month, the Statistics Department said on Monday.

The cost of private road transport, which includes car prices, declined 1.6 per cent in July over the same month last year, reversing from a 2.8 per cent increase in June.

This was due to a high base in July 2013, when Certificate of Entitlement premiums surged, according to a separate statement from the Trade and Industry Ministry and the Monetary Authority of Singapore.

Petrol pump prices also rose at a slower pace of 3.1 per cent last month, compared with 6.4 per cent in June.

Food prices went up less quickly in July compared with the previous month. Food inflation eased to 3 per cent from June's 3.2 per cent, on the back of a more moderate rise in the prices of non-cooked food items and prepared meals.

But services inflation was higher at 2.5 per cent from June's 2.2 per cent, led by stronger increases in pre-school fees, medical treatment costs and holiday travel expenses.

This boosted core inflation, which excludes the cost of accommodation and private road transport. Core inflation edged up to 2.2 per cent in July from 2.1 per cent in June.