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SINGAPORE: Consumer prices in Singapore declined in November as the authorities forecast a “slightly positive” turn in 2021.
Core inflation fell to -0.1% year-on-year in November, compared with -0.2% in October, data from the Monetary Authority of Singapore (MAS) and the Ministry of Commerce showed on Wednesday (December 23). and Industry (MTI). .
The lower rate of decline in November was mainly due to a lower drop in the costs of utilities and electricity and gas, as well as higher food inflation.
Costs of services fell 0.2 percent in November, mainly due to a smaller decrease in fees for outpatient services and an increase in costs for recreational and cultural services, the agencies said.
The cost of electricity and gas fell more modestly by 6.8 percent in November, compared with -7.2 percent in October, as refunds for specific utilities ceased the previous month.
Food inflation rose 1.8 percent in November, mainly due to a steeper rise in prices for uncooked food and restaurant meals.
The cost of retail and other goods fell more sharply by -2 percent. This was due to a greater drop in the prices of clothing and footwear and a slower rate of increase in the cost of household durable goods.
Private transportation costs and accommodation inflation were unchanged in November compared to October, at -1.3% and 0.3%, respectively.
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MAS and MTI maintained their October outlook that external inflation remained low amid weak demand in key commodity markets and “persistent negative output gaps” in Singapore’s main trading partners.
“On the domestic front, cost pressures are expected to remain moderate, with accumulated slack in the labor market weighing on wages,” MAS and MTI said.
“However, core inflation is forecast to turn slightly positive in 2021 as the disinflationary effects of government subsidies introduced this year fade and demand for some domestic services gradually recovers.”
Housing costs are expected to fall as rents could soften, due in part to declining foreign employment, the agencies said.
Private transportation costs should increase modestly before an anticipated reduction in the supply of Certificates of Ownership next year.
READ: Singapore’s exports fell 6.3% in the third quarter of 2020, slower than the previous quarter’s decline
MAS and MTI forecast that core inflation and headline inflation will be between -0.5% and 0% in 2020.
In 2021, core inflation is expected to average 0-1%, while headline inflation is expected to be between -0.5% and 0.5%.
Last month, MTI said that Singapore’s economy is expected to contract between 6% and 6.5% this year.
