SINGAPORE (Xinhua) – The consumer price index (CPI) inflation in Singapore in January fell 0.4 per cent year on year, following the 0.1 per cent contraction in the previous month, Singapore’s Department of Statistics said on Monday.
The Ministry of Trade and Industry and the Monetary Authority of Singapore (MAS) attributed the contraction mainly to account of sharper price declines in direct oil-related items as well as lower food and services inflation.
Prices of direct oil-related items decreased further by 13.6 per cent in January, after falling by 7.4 per cent in the preceding month. MAS attributed the decline to further drop of petrol pump prices and electricity tariffs following the correction in global oil prices.
Food inflation moderated to 2.2 per cent in January from 2.7 per cent in December last year, as a result of the high base in January 2014 when food prices rose significantly during the Chinese New Year festive period.
The cost of private road transport fell by 5.0 per cent, compared to the 5.3 per cent drop in the previous month, owing to a smaller correction in car prices.
Overall services inflation slowed to 1.2 per cent while the cost of accommodation dropped by 1.9 per cent in January.
The core inflation, which excludes changes in the price of private road transport and accommodation, came in at 1.0 per cent in January compared to 1.5 per cent in December, due to the cut in electricity tariffs as well as the fall in food and services inflation, MAS said.
According to MAS, external price developments are expected to be generally benign, given ample supply buffers in the major commodity markets. At the same time, while domestic cost pressures will remain, the extent to which businesses will pass on accumulated costs to consumer prices could be constrained in the near term by the moderate economic growth environment.
Therefore, MAS said the inflation is expected to come in at -0. 5 to 0.5 per cent this year, while core inflation is expected to stay elevated at 0.5 to 1.5 per cent.