Singapore's overall, core inflation both ease in November

Headline inflation at six-month low as private transport costs decline for fifth month in a row

Singapore's headline or overall inflation fell to 0.3 per cent in November, a six-month low, as private transport costs fell for the fifth month in a row this year.

The drop in the consumer price index, which measures the cost increase of all items, is the first in three months. Since August, it had remained at 0.7 per cent.

But last month, it eased on the back of smaller increases in services costs and in prices of electricity and gas, and retail items, offsetting a slower pace of decline in accommodation costs.

Core inflation, which strips out accommodation and private transport costs, also slowed, to 1.7 per cent from 1.9 per cent in October, a joint statement from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said yesterday.

Both overall and core inflation came in under economists' expectations of 0.6 per cent and 1.9 per cent respectively, according to consensus forecasts compiled by Bloomberg.

Private road transport costs fell sharply by 3.6 per cent year on year last month, accelerating from the 0.6 per cent decline in October, due to lower car prices, a fall in certificate of entitlement premiums and a smaller rise in petrol prices. The three factors led to the steepest decline in this category since July 2016, according to Department of Statistics figures.

Other consumer categories saw slower inflation last month compared with October.

Services inflation eased to 1.2 per cent compared with 1.4 per cent previously, due to a decline in telecommunications services fees and a slower pace of increase in holiday expenses.

Retail items inflation came in at 1.1 per cent, moderating from the 1.3 per cent in October, as the cost of telecommunications equipment, clothing and footwear items, household durables and medical products rose at a slower pace.

The cost of electricity and gas increased at a slower pace of 15.4 per cent, compared with the 16.6 per cent rise in the preceding month, reflecting the phased launch of the open electricity market on electricity prices.

Food inflation was unchanged from October, coming in at 1.4 per cent last month.

Accommodation costs fell by 2.1 per cent, cooling from the 2.5 per cent drop in October. This was because of a more gradual decline in housing rentals, as well as a larger increase in the cost of housing maintenance and repairs.

MAS and MTI maintained their outlook for 2018 and 2019, tipping core inflation to rise modestly in the months ahead, at 1.5 to 2 per cent this year, and 1.5 to 2.5 per cent next year. Headline inflation is projected at 0.5 per cent this year before picking up to 1 to 2 per cent next year, said MAS and MTI.

A version of this article appeared in the print edition of The Straits Times on December 25, 2018, with the headline 'Singapore's overall, core inflation both ease in November'. Print Edition | Subscribe