SINGAPORE - CONSUMER price inflation in Singapore eased more than expected to 1.2 per cent in July from 1.8 per cent in June, mainly on account of lower private road transport costs due to a high base a year ago.
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Here is a joint press statement from the Monetary Authority of Singapore and the Ministry of Trade and Industry:
CPI-All Items inflation came in lower at 1.2 per cent y-o-y in July
CPI-All Items inflation eased to 1.2 per cent in July from 1.8 per cent in June, mainly due to lower private road transport cost.
Private road transport cost fell by 1.6 per cent in July, following the 2.8 per cent increase a month earlier.
This mainly reflects the high base last year when COE premiums surged, while petrol pump prices also rose at a slower pace of 3.1 per cent, compared to 6.4 per cent a month ago.
Accommodation cost was largely unchanged, after edging up by 0.5 per cent in the previous month, given the soft housing rental market.
Food inflation eased to 3.0 per cent from 3.2 per cent a month ago, on account of a more moderate rise in the prices of non-cooked food items and prepared meals.
Services inflation was higher at 2.5 per cent, compared to 2.2 per cent in the preceding month, led by stronger increases in pre-school fees, medical treatment cost and holiday travel expenses.
CPI less imputed rentals on owner-occupied accommodation (CPI-ex OOA) rose at a slower pace of 1.5 per cent in July
Inflation as measured by CPI less imputed rentals on owner-occupied accommodation (OOA) fell to 1.5 per cent in July from 2.2 per cent in June, largely on account of the decline in private road transport cost.
MAS Core Inflation was higher at 2.2 per cent in July
MAS Core Inflation, which excludes the cost of accommodation and private road transport, inched up to 2.2 per cent in July from 2.1 per cent a month ago, due to the pickup in services inflation.
On a month-on-month basis, CPI-All Items fell by 0.3 per cent in July, following the 0.7 per cent decline in June.
MAS Core Inflation edged up to 0.3 per cent from -0.1 per cent in the previous month.
Outlook
External price developments should be relatively benign for the rest of the year, notwithstanding some volatility in global oil prices recently.
Supply buffers in the major commodity markets continue to be ample, and inflation in most of Singapore's key import source countries is expected to be modest.
Domestic cost pressures, parti cularly stemming from a tight labour market, are likely to remain the primary source of inflation. Taking these factors into account, MAS Core Inflation is projected to stay elevated at 2-3 per cent in 2014. CPI-All Items inflation is expected to ease for the rest of 2014 due to lower contributions from imputed rentals on OOA and car prices.
For the whole year, imputed rentals are likely to add negligibly to overall inflation while c ar prices should pose a slight drag.
Correspondingly, CPI-All Items inflation is projected to come in at 1.5-2.0 per cent in 2014.
Above: Graphic from SingStat