Inflation down for 19th straight month with 1.6% drop in May

The consumer price index was dragged down by housing, as well as utilities and transport.
The consumer price index was dragged down by housing, as well as utilities and transport. PHOTO: REUTERS

SINGAPORE - Inflation fell for a 19th straight month in May, extending the longest stretch of falling prices seen here since 1977.

The consumer price index fell 1.6 per cent last month from May last year, after a 0.5 per cent slide in April. It was dragged down by housing and utilities and transport.

The dip in the headline number was more than forecast by some economists of a 0.7 per cent fall.

This larger slide was mostly due to base effects associated with the timing of when Service and Conservancy Charges (S&CC) rebates were disbursed, the Monetary Authority of Singapore and Ministry of Trade and Industry said in a joint statement.

These S&CC rebates affect housing maintenance and repair costs.

Accommodation costs fell 6.0 per cent year on year while fuel and utilities costs fell 9.5 per cent.

Private road transport costs fell by 7.6 per cent year on year , thanks to a larger decline in petrol pump prices and reflecting the relatively high base in May last year.

However, prices elsewhere in the economy continued to edge upwards.

Core inflation, which excludes accommodation and private road transport costs to better gauge everyday expenses, was up 1 per cent last month, after rising 0.8 per cent in April.

This reflected a pickup in services inflation, the MAS and MTI said.

Core inflation is expected to hover between the 0.0 and 1 per cent range in coming months and more importantly, below the medium-term target of 2 per cent, DBS Research said in a note on Thursday (June 23).