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The Department of Statistics said on Monday morning that headline inflation eased to 0.1 per cent, mainly due to base effects associated with fluctuations in Certificate of Entitlement (COE) premiums, as well as sharper falls in the costs of accommodation and oil-related items. Economists had been expecting inflation to stay at 0.6 per cent, which was September's inflation rate.
Core inflation, which strips out accommodation and private road transport costs, inched down to 1.7 per cent in October, from 1.9 per cent in September.
Here's what private-sector economists had to say:
ANZ economists Ng Weiwen and Glenn Maguire explain the drop in headline inflation:
"Singapore's headline inflation rose at the slowest pace since December 2009. This was a function of a sharp decline in accommodation costs and base effects associated with COE premiums, exacerbated by a slump in energy prices. Nonetheless, this is broadly within MAS (Monetary Authority of Singapore) guidance that headline inflation could ease to below 0.5 per cent in Q4 2014."
Barclays economist Leong Wai Ho on his inflation outlook:
"All told, the divergence between core and headline will continue into 2015. We expect the cooling property market and lower electricity tariffs to offset higher labour costs and prices of food imported from Malaysia."
OCBC economist Selena Ling adds:
"MAS and MTI (Ministry of Trade and Industry) remain watchful and reiterated that external price developments are expected to stay benign given ample buffers in major commodity markets, but domestic food inflation could remain elevated in the near term given the higher prices of regional food supplies. Moreover, wage pressures are expected to continue to persist and filter down to various services prices, and in turn contribute to firm MAS core inflation."