Singapore consumer prices down 0.8% in October, but core inflation up 0.3%

Singapore's consumer price index fell 0.8 per cent from the same month a year ago.
Singapore's consumer price index fell 0.8 per cent from the same month a year ago.PHOTO: LIM YAOHUI FOR THE STRAITS TIMES

SINGAPORE - The negative headline inflation which Singapore has experienced since November last year continued for the 12th straight month in October.

However, core inflation, which is seen as a better gauge of everyday household expenses, continued to rise on education and food.

The consumer price index, which measures headline inflation, fell 0.8 per cent from the same month a year ago - extending the longest stretch of deflation that Singapore has experienced since 2009.

The latest bout of negative inflation was largely due to falls in housing and private transport costs.

October's fall is bigger than UOB economists' estimates for a 0.4 per cent decline, and follows a 0.6 per cent contraction in September's consumer price index.

Transport costs declined 1.7 per cent, while housing and utilities dropped 4.3 per cent over the year.

The Monetary Authority of Singapore's (MAS) core inflation measure, which strips out accommodation and private road transport costs, rose 0.3 per cent compared with October last year.

This was mainly due to the lower costs of oil-related and retail items, said MAS and the Ministry of Trade and Industry in a joint statement on Monday (Nov 23).

Services inflation stood at 0.8 per cent in October, in line with the 0.8 per cent level in September.

MAS and MTI said that external sources of inflation are expected to stay "generally benign, given ample supply buffers in the major commodity markets and weak global demand conditions".

"Oil prices for the whole of 2016 are expected to remain low, coming in at around this year's projection of US$54 per barrel," said the agencies. The amount is equivalent S$76.60.

"On the domestic front, some wage cost pressures remain, but their pass-through to consumer prices will continue to be constrained by the subdued economic growth environment."