Singapore Inflation Rate Slows to 6-Month Low of 0.4% in July


Singapore's annual inflation rate fell to 0.4 percent in July 2019 from 0.6 percent in the previous month and below market expectations of 0.55 percent. That was the lowest inflation rate since January, amid a steeper fall in cost of housing & utilities while food inflation was steady for the third straight month.

Cost of housing & utilities dropped 1.5 percent year-on-year in July, nearly twice of a 0.8 percent fall in a month earlier, with prices of accommodation falling for the third straight month (-0.9 percent vs -1.1 percent) in the wake of the phased nationwide launch of the Open Electricity Market (OEM) on electricity prices. Also, prices declined faster for both clothing & footwear (-2.1 percent vs -0.6 percent), and communications (-2.2 percent vs -1.7 percent). At the same time, cost slowed for recreation & culture (1.3 percent vs 1.8 percent), mainly due to holiday expenses (2.5 percent vs 3.3 percent); education (2.4 percent vs 2.5 percent), miscellaneous goods & services (0.3 percent vs 0.4 percent), and household durables & services (0.9 percent vs 1.1 percent). 

Meanwhile, prices of food increased by 1.4 percent in July, the same pace as in the previous two months. Within food excluding food servicing services, prices rose further for bread & cereals (1 percent vs 0.9 percent); milk, cheese & eggs (0.6 percen vs 0.1 percent); vegetables (3.5 percent vs 3.8 percent); non-alcoholic beverages (1.7 percent vs 2 percent), while rebounded for fruits (0.3 percent vs -0.1 percent). In contrast, prices fell for meat (-0.5 percent vs -0.4 percent); fish & seafood (-0.1 percent vs 1.4 percent); oils & fats (-0.8 percent vs -0.1 percent); and sugar, preserves & confectionery (-0.2 percent vs -0.8 percent). Among food servicing services, inflation was unchanged for both restaurant food  (at 1.9 percent) and fast food (at 1.5 percent). Meanwhile, prices of catered food slowed (4.4 percent vs 4.9 percent), while those of hawker food went up a bit higher (1.6 percent vs 1.5 percent).

Conversely, inflation quickened for transport (0.9 percent vs 0.6 percent in June), namely private road transport (0.3 percent vs 0.2 percent), public road transport (2.5 percent vs 2.4 percent), and other travel & transport (1.9 percent vs 0.1 percent). Also, cost of health care went up faster (1.3 percent vs 1.1 percent), mostly driven by medical & dental treatment (2 percent vs 1.9 percent).

Annual core inflation, which exclude costs of accommodation and private road transport, fell to 0.8 percent in July, the lowest since April 2016, from 1.2 percent in June.

Meantime, against the backdrop of slower GDP growth, uncertainties in the global economy, as well as the continuing restraining effects of the Monetary Authority of Singapore’s policy tightening in 2018, the central bank and trade ministry now expect 2019 core inflation to come in within the lower half of the 1–2 percent forecast range, while 2019 inflation to average between 0.5-1.5 percent.

On a month-on-month basis, consumer prices dropped by 0.4 percent in July, faster than a 0.2 percent fall in June. 

Singapore Inflation Rate Slows to 6-Month Low of 0.4% in July


Statistics Singapore l Rida Husna | rida@tradingeconomics.com
8/23/2019 9:08:25 AM