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SINGAPORE: Singapore’s core inflation contracted for the seventh month in a row in August, and officials expect economic challenges and a weak labor market to continue to dampen consumer demand.
Core inflation, a key policy consideration for Singapore’s central bank, fell -0.3 percent in August from the same period last year, the Monetary Authority of Singapore (MAS) and the Ministry of Commerce and Commerce said. Industry (MTI) in a joint press release. on Wednesday (September 23).
The indicator, which excludes the price of private transport and accommodation, had fallen by -0.4% in July.
The pace of decline had moderated mainly due to a smaller drop in the cost of services, retail and other goods, as well as electricity and gas, MAS and MTI said.
The general consumer price index (CPI) or headline inflation was unchanged at -0.4 percent year-on-year in August after a steeper drop in private transport costs was offset by a more moderate drop in prices. basic components of the CPI.
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The drop in service costs was -0.5 percent in August, decreasing from -0.8 percent in July. This was due to a lower drop in the costs of point-to-point transport services and a greater increase in the rates of telecommunications services.
The retail and other goods segment also registered a minor decrease of -1.3 percent in August, compared with -1.6 percent in July, as the prices of clothing, footwear and goods Recreational items fell at a more moderate rate.
Electricity and gas costs fell at a slower pace of -14.6% in August, compared to -15.2% in July, due to the slowdown in new subscriptions on the Open Electricity Market (OEM ).
Retail electricity pricing plans under the OEM are generally lower than the SP Group’s electricity rate, MAS and MTI said.
“Therefore, as the adoption of OEM plans slows year over year, the cushioning effect of OEMs on electricity prices also decreases,” they said.
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Meanwhile, housing inflation was unchanged in August at 0.4 percent, while food prices rose at a slower pace of 1.8 percent.
Private transportation costs registered a larger drop of -2.3% in August, compared to -2.1% in July.
INFLATION IS EXPECTED TO REMAIN DOWN
MAS and MTI said inflation is expected to remain subdued overall, and their core inflation forecast for MAS and CPI for all items will average between -1% and 0% this year.
“In the coming quarters, external sources of inflation are likely to remain benign amid
global demand conditions, ”said MAS and MTI.
Oil prices are expected to remain low for an extended period, while increases in international food prices should generally contain amid better supply conditions.
