In August of 2014, private road transport cost fell by 2.9 percent, following the 1.6 percent correction a month earlier, largely due to lower COE premiums in July. Petrol pump prices also rose at a slower pace of 0.7 percent, compared to 3.1 percent a month ago, on account of the recent weakness in global oil prices. Services inflation edged down to 2.1 percent in August from 2.5 percent in the preceding month, led by more modest increases in the costs of recreation & entertainment and holiday travel. Accommodation cost declined by 0.2 percent after coming in flat in July, given the soft housing rental market. Overall food inflation was slightly lower at 2.9 percent compared to 3.0 percent in July, as the increase in the prices of prepared meals eased. Non-cooked food prices, however, rose at a quicker pace of 3.4 percent compared to 2.8 percent in July, reflecting steeper price increases for seafood and vegetables.
MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased slightly to 2.1 percent in August, from 2.2 percent a month ago, mainly due to the lower contribution from services costs. The government expects MAS core inflation to stay elevated between 2.0 percent to 3.0 percent in 2014.
On a month-on-month basis, the CPI accelerated 0.5 percent in August after a 0.3 percent decline in July mostly due to higher prices of food, largely for seafood, dairy products & eggs and fruits, and increasing costs of services, mainly tertiary tuition fees and household services.