Singapore Deflation Eases in June


Singapore consumer prices fell 0.7 percent year-on-year in June of 2016, following a 1.6 percent drop in May and market estimates of a 1.1 percent decline. It was the 20th straight month of fall, as cost of housing & utilities and transport dropped less than in a month earlier while prices of food rose at a slower pace.

Year-on-year, downward prices pressure came from: housing & utilities (-4.2 percent in June from -6.4 percent in May, largely due to a 9.4 percent drop in fuel & utilities and a 3.5 percent fall in accommodation) and transport (-4.3 percent from -5.7 percent, due to a 5.7 percent decline in private road transport, a 0.8 percent fall in other travel & transport and a 0.7 percent in public road transport). In contrast, upward prices pressure came from clothing & footwear (+0.2 percent from -0.3 percent), household durables & services (+3.4 percent from +3.3 percent, mainly due to a 1.0 percent rise in household durables and a 4.9 percent increase in household services & supplies), health care (+0.7 percent from +1.0 percent, mainly due to a 1.0 percent rise in medical & dental treatment and a 0.5 percent drop in medical products, appliances & equipment), communication (+0.4 percent from -0.1 percent), recreation & culture (+1.6 percent from +1.1 percent,  mainly due to a 5.9 percent increase in newspapers, book & stationery, a 2.1 percent in holiday expenses and a 0.6 percent rise in recreation & entertainment), education (+3.2 percent from +3.2 percent) and miscellaneous goods & services (+0.5 percent from +0.2 percent, mainly due to a 0.2 percent rise in personal effects, a 0.2 percent growth in other miscellaneous expenditure and a 0.8 percent rise in personal care).

Prices of food rose 2.1 percent in June, down slightly from a 2.2 percent rise in a month earlier. Among food, cost of food excluding food servicing services increased by 2.6 percent, following a 2.5 percent rise in the preceding month while food servicing services rose 1.8 percent, after a 2.0 percent rise in March. Among food excluding food servicing services, cost increased for bread & cereals (+0.6 percent), meat (+1.5 percent); fish & seafood (+6.2 percent); fruits (+3.5 percent); milk, cheese & eggs (+2.5 percent), vegetables (+5.2 percent); sugar, preserves & confectionery (+0.6 percent) and other food (+1.5 percent). In contrast, prices declined for oils & fats (-2.5 percent) and non-alcoholic beverages (-0.4 percent). Among food servicing services, prices increased for all categories: restaurant foods (+2.2 percent), fast food (+2.8 percent), hawker food including food courts (+1.5 percent) and catered food (+0.5 percent).

Core inflation, which excludes costs of accommodation and private road transport, rose 1.1 percent year-on-year from 1.0 percent in May and slightly above market expectations of 1.0 percent. It was the highest figure since February 2015. The country's central bank said that core inflation is likely to average around 1.0 percent in 2016, compared to the previous prediction of the lower half of 0.5-1.5 percent.

On a month-on-month basis, consumer prices rose 0.7 percent, compared to a 0.7 percent fall in May. Cost went up for: food (+0.1 percent), housing & utilities (+2.1 percent), household durables & services (+0.2 percent), transport (+1.4 percent), communication (+0.4 percent) and recreation & culture (+0.7 percent). In contrast, cost fell for clothing & footwear (-1.8 percent) and transport (-4.3 percent). Prices remained unchanged for education.

Singapore Deflation Eases in June


Statistics Singapore l Rida Husna | rida@tradingeconomics.com
7/25/2016 7:32:30 AM