Singapore’s inflation at 8-month low

23 February 2012

Singapore: Singapore’s headline inflation rate in January rose 4.8% year-on-year, easing from the 5.5% on-year rise in December 2011, thanks to lower contribution from private transport cost.

The 4.8% rise in the consumer price index (CPI) was the lowest year-on-year increase since May.

However core inflation – which excludes accommodation and private road transport – rose to a three-year high of 3.5%.

The Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) warned inflation will likely remain elevated in coming months.

Analysts say this indicates inflation remains a concern and that monetary authorities are likely to keep policy tight.

Taking away rentals from owner-occupied accommodation (OOA), inflation was 3.5%, according to numbers released by the Singapore Department of Statistics on Thursday.

OOA cost can be removed from calculating headline inflation as it has no impact on the cash expenditure of most households in Singapore as they already own their homes, said the agency.

Housing costs remained a big driver of inflation, up 9.5 per cent from last January. Food prices rose 3.8% from last January, while healthcare costs rose 3.2%. The recreation and others component saw a 3.5 per cent increase.

– CNA/ir/ck

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