Core inflation hit 0.3% in January

This was blamed on lower services inflation and a steeper drop in the cost of retail.

Core inflation came at 0.3% YoY in January, lower than the 0.6% recorded in December 2019, according to figures from the Monetary Authority of Singapore (MAS).

This was largely due to lower services inflation and a steeper drop in the cost of retail & other goods. MAS also noted that this reflects the impact of the rebasing of the CPI to 2019 as the base year.

Meanwhile, consumer price index (CPI) ‐ all items inflation remained flat in January at 0.8% YoY, compared to the previous month, as higher private transport inflation and an increase in accommodation cost was offset by lower inflation in the remaining core CPI basket.

By segments, inflation in private transport rose on the back of steeper rise in car prices, whilst cost of electricity & gas fell at a slower pace as regulated electricity tariffs increased.

Food inflation remained unchanged over the same period as a larger jump in the prices of non‐cooked food was offset by a smaller increase in the prices of prepared meals. Cost of retail & other goods recorded a steeper drop as the prices of medical products and clothing & footwear registered larger declines.

Lastly, service inflation slowed, thanks to a decline in tuition & other fees, reflecting the effect of enhanced pre‐school subsidies. There was also a smaller increase in telecommunication services fees, as well as a larger fall in the cost of healthcare services.

MAS is projecting core inflation and CPI‐all items inflation to remain in between 0.5–1.5%.

“In the quarters ahead, external sources of inflation are likely to remain benign, amidst weak demand conditions, and generally well‐supplied food and oil commodity markets. On the domestic front, labour market conditions continued to soften slightly, which could lead to a moderation in unit labour cost growth this year,” MAS stated.

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