Consumer prices inch up 0.4% in October

Shoppers shopping at stores during the Great Singapore Sale. PHOTO: ST FILE

SINGAPORE - Singapore's inflation remained muted last month though the cost of some key items - including food, healthcare and education - continued to edge up.

The consumer price index - the main measure of inflation - edged up 0.4 per cent in October compared with the same month last year, according to Department of Statistics data released on Thursday (Nov 23).

This was comparable to the preceding month's inflation rate, but slightly below economist estimates of a 0.5 per cent rise.

Food inflation came in at 1.5 per cent, lifted largely by higher prices of non-cooked food, while healthcare costs went up 2.2 per cent year-on-year.

Private road transport inflation edged up to 2.2 per cent in October from 2.1 per cent in the previous month, on the back of a smaller drop in car prices.

Education costs rose 2.6 per cent over the same month a year earlier, largely boosted by higher prices of tuition and other fees.

Meanwhile, the cost of accommodation fell by 4.2 per cent in October, steeper than the 3.9 per cent decline registered in the previous month. This was because more Service & Conservancy Charges (S&CC) rebates were given out this year compared with last year.

The rebates given to households in most HDB flat types last month were unchanged from those disbursed in October 2016. However, households in executive/multi-generation flats received rebates this year but not last year. This resulted in a negative contribution to year-on-year inflation in October 2017.

Core inflation - which strips out accommodation and private road transport costs - was 1.5 per cent last month, on a par with September's 1.5 per cent.

This came as higher food inflation offset the smaller increase in the cost of electricity and gas.

Imported inflation is likely to rise mildly as global demand improves, said the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) in a joint statement.

Global oil prices are expected to increase only slightly in 2018 compared with 2017 while food commodity prices are also expected to rise modestly.

This means overall cost pressures in the economy should remain relatively restrained, MAS and MTI said. "Although labour market conditions have improved recently, the gradual absorption of previously accumulated slack will temper wage pressures in the near term.

"Meanwhile, other non-labour costs such as commercial and retail rentals continue to be subdued." Core inflation - a major policy consideration for the MAS - is projected to come in at about 1.5 per cent in 2017, and average one to 2 per cent next year.

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