Consumer prices in Singapore fall for 24th consecutive month
Photo: Reuters
SINGAPORE — Consumer prices fell for the 24th consecutive month in October as accommodation costs continued its downtrend, defying expectations by economists that recent gains in oil prices would help Singapore escape deflation for the first time in two years.
But the data on Wednesday (Nov 23) also showed rising inflationary pressures on the prices of food, healthcare and education services, raising concerns among economists on the higher cost of living for the average household.
The All-Items Consumer Price Index (CPI) fell 0.1 per cent year-on-year last month, compared with the 0.2 per cent decline in September, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) in a joint statement on Wednesday.
Last month, consumer prices of food, household durables and services, healthcare and education rose between 0.9 per cent and 3.2 per cent. On the other end, prices for housing and utilities, transport, as well as clothing and footwear fell between 0.2 per cent and 3.8 per cent.
MAS Core Inflation — which excludes the costs of accommodation and private road transport — rose to 1.1 per cent in October from 0.9 per cent in September, largely on account of the smaller decline in the cost of electricity, liquefied petroleum gas and gas, which more than offset lower food and services inflation.
Core inflation, which has been increasing gradually since the start of this year, is closely watched by economists as it reflects items that have greater cost pressures on low-income households. Economists in a Reuters poll had expected Singapore to see headline CPI come in flat after 23 months of declines, and for core inflation to rise 1.2 per cent.
Dr Tan Khay Boon, senior lecturer, SIM Global Education said: “The higher food prices and dearer household durables and services will translate to a higher cost of living for average households. The more worrying item is actually the cost of education which exhibits an upward trend. It is important to keep education and training costs down as more people will need to undergo training to acquire new skills when structural unemployment kicks in.”
In its joint statement on Wednesday, MAS and MTI said: “On the external front, imported inflation is likely to rise mildly given ample supply buffers in the commodity markets and soft global demand conditions. Notwithstanding continued short-term volatility, global oil prices are expected to increase next year from its trough this year.
“Domestically, overall cost pressures should be muted. Amid a pullback in hiring, conditions in the labour market have slackened. This will cap underlying wage growth, even as non-labour business costs have eased. The subdued growth environment will also constrain the extent of cost pass-through to consumer prices.”
Headline inflation is expected to pick up to 0.5 to 1.5 per cent next year, from about minus 0.5 per cent this year, largely reflecting the rise in private road transport cost. Meanwhile, MAS core inflation is expected to average 1 per cent for this year, and is expected to rise to between 1 and 2 per cent next year.
