Consumer Price Index rises 0.6% in 2017
TODAY file photo
SINGAPORE — Headline inflation fell by 0.1 per cent for lower-income households from July to December last year, the sixth consecutive half-yearly decline.
However, data from the Department of Statistics (SingStat) released on Tuesday (Jan 23) showed that this group felt the brunt of inflation when excluding imputed rentals on owner-occupied accommodation (OOA) which do not involve actual cash expenditure for households who own their homes.
Excluding accommodation costs, inflation for lower-income households was 1.8 per cent, compared to 1.5 per cent for the middle 60 per cent and highest 20 per cent income groups. UOB economist Francis Tan said: “Weaker rentals and effects from disbursements helping households such as the service and conservancy charges rebates helped pull down overall headline inflation for lower income groups.”
Across all income groups, healthcare and education costs went up the most while price increases for recreation and culture, as well as household durables and services were the lowest.
For the whole of last year, the Consumer Price Index (CPI)-All Items for general households rose by 0.6 per cent, reversing the 0.5 per cent decline in 2016. Excluding imputed rentals on OOA, the CPI rose by 1.7 per cent last year, higher than the 0.3 per cent increase in 2016. Consumer prices for the whole of 2016 fell for the first time since 2002.
Separately, the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) said CPI-All Items in December eased to 0.4 per cent, compared to 0.6 per cent in November, largely on account of lower private road transport and services inflation. MAS core inflation, which excludes the costs of accommodation and private road transport, moderated to 1.3 per cent in December, from 1.5 per cent in the previous month, due mainly to lower services inflation.
Last year, MAS core inflation averaged 1.5 per cent. This year, MAS and MTI expect headline inflation to stay in the range of 0 to 1 per cent, with MAS core inflation between 1 and 2 per cent.
Global oil prices are expected to increase only slightly this year compared to last year, said MAS and MTI. “Although labour market conditions have improved recently, the gradual absorption of previously accumulated slack will temper wage pressures in the near term. Meanwhile, other non-labour costs such as commercial and retail rentals continue to be subdued,” they added.
In the coming months, Dr Tan Khay Boon, a senior lecturer at SIM Global Education, said the recent disruption to the supplies of fish and vegetables — partly due to the weather — as well as the upcoming Chinese New Year period will exert upward pressure on food prices. “The higher oil prices may also impose some inflationary pressure on transport and utility costs, causing headline inflation to likely edge upwards in the near future,” he said.
He added that healthcare and education costs may also increase, which can be a concern for the average household.
