Drop in Singapore’s Headline Inflation Rate

The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) recently revealed that Singapore’s headline inflation rate fell to 0 per cent in January this year from 0.4 per cent in December.

According to a statement, the Consumer Price Index (CPI)’s year-on-year drop to 0 per cent in January was largely due to lower accommodation and private road transport inflation.

When Service and Conservancy Charges (S&CC) rebates were disbursed to HDB households in January 2018, the cost of accommodation fell by 5.3 per cent, compared to the 3.8 per cent decline registered in the preceding month.

This was not the case in the same month last year.

Due to lower car prices and a decline in Certificate of Entitlement (COE) premiums, private road transport inflation moderated to 1.6 per cent in January from 2.6 per cent in the previous month.

However, according to MAS and MTI,  core inflation, which excludes the costs of accommodation and private road transport, nudged up to 1.4 per cent from 1.3 per cent the previous month. 

“This was due to higher retail inflation more than offsetting a decline in food inflation, said MAS and MTI,” read the statement.

Food inflation fell to 1.1 per cent in January from 1.4 per cent in December, largely on account of a moderation in the price increases for non-cooked food items. 

The cost of prepared meals also rose at a slightly slower pace compared to the previous month.

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 air fares.

“Services inflation was 1.3 per cent in January, unchanged from the previous month,” added the two agencies.