Core inflation falls to lowest in three years

Broad-based weakness in consumer prices caused core inflation - which strips out private road transport and accommodation costs - to drop to 0.8 per cent last month.
Broad-based weakness in consumer prices caused core inflation - which strips out private road transport and accommodation costs - to drop to 0.8 per cent last month.PHOTO: ST FILE

In a sign that the economic downturn is hitting consumer demand, Singapore's core inflation fell last month to its lowest level in more than three years.

Broad-based weakness in consumer prices caused core inflation - which strips out private road transport and accommodation costs - to drop to 0.8 per cent last month. This is down from 1.2 per cent in June and is its lowest since April 2016. Analysts say the muted prices suggest that consumers are worried about their job prospects and have cut back on spending.

Yesterday, the authorities also downgraded their guidance for full-year core inflation. It is now expected to come in "within the lower half of the 1 per cent to 2 per cent forecast range", from "near the mid-point" of the range.

Experts are of the view that the Monetary Authority of Singapore will likely ease monetary policy during its upcoming October review to boost economic growth.

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A version of this article appeared in the print edition of The Straits Times on August 24, 2019, with the headline 'Core inflation falls to lowest in three years'. Print Edition | Subscribe