Singapore’s consumer prices stay flat in January

SINGAPORE’S inflation stayed flat last month even though the cost of key items such as healthcare and education went up.

There was no change in the consumer price index – the main measure of inflation – compared with the same month last year, said the Statistics Department.

This was a dip from December's rate of 0.4% and well below economist estimates of a 0.4% increase. This was mostly due to lower accommodation and private road transport inflation.

Core inflation, which strips out the cost of accommodation and private road transport to better gauge everyday expenses, edged up to 1.4% last month, slightly ahead of the 1.3% in December.

Accommodation costs fell 5.3% last month compared with the 3.8% decline in December, as service and conservancy charge rebates were disbursed to HDB households in January this year but not in the same month last year.

Private road transport inflation moderated to 1.6% last month, from 2.6% in December, due to lower car prices and a decline in certificate of entitlement premiums.

Food inflation eased to 1.1% last month from 1.4% in December. The cost of prepared meals rose at a slightly slower pace compared with December.

Services inflation was 1.3%, unchanged from December.

A smaller decline in the cost of public road transport, together with larger increases in education and recreational and cultural services fees, offset a fall in telecommunications services fees and a steeper drop in airfares.

The Monetary Authority of Singapore and Ministry of Trade and Industry said imported inflation is likely to rise mildly as global demand improves amid ample supply in key commodity markets. Oil prices are also expected to increase only slightly compared with last year.

“Overall, cost pressures in the economy should remain relatively restrained. 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 said in a joint statement.

Core inflation is expected to stay in the 1%-2% range this year, while headline inflation is projected to be zero to 1%. — The Straits Times/ ANN