Sep 24, 2014

    Singapore's inflation eases on softer COE prices

    CONSUMER price inflation eased more than expected to 0.9 per cent last month from 1.2 per cent in July, again because of lower private road transport costs.

    The median forecast of 20 economists polled by Bloomberg before the Department of Statistics released the data on Tuesday was for a 1.1 per cent year-on-year rise in the consumer price index.

    Private road transport costs fell by 2.9 per cent, largely due to lower certificate of entitlement (COE) premiums last month.

    This followed July's drop of 1.6 per cent.

    The Monetary Authority of Singapore and the Ministry of Trade and Industry said in joint comments that the easing in last month's headline inflation also reflects "a more moderate increase in services fees".

    Services inflation edged down to 2.1 per cent last month from 2.5 per cent in July, due to more modest rises in the costs of recreation and entertainment, and holiday travel.

    Overall food inflation was slightly lower too, at 2.9 per cent compared to 3 per cent in July, as the increase in prices of prepared meals eased.

    Non-cooked food prices, however, rose at a faster pace of 3.4 per cent compared to 2.8 per cent in July, because of steeper price increases for seafood and vegetables.

    Given the soft housing rental market, accommodation costs declined by 0.2 per cent after coming in flat in July.

    With a lower contribution from services costs, core inflation - which strips out the costs of accommodation and private road transport - inched down slightly to 2.1 per cent last month, from 2.2 per cent in July.