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WHILE Singapore's headline inflation rate eased to -0.4 per cent in July from June's -0.3 per cent, core inflation rose to 0.4 per cent last month from 0.2 per cent in June.
This is compared to private-sector expectations of a -0.2 per cent headline and 0.3 per cent core inflation reading, according to a Bloomberg poll conducted before the Department of Statistics released July's data on Monday.
Core inflation excludes the costs of accommodation and private road transport.
The lower headline inflation reading was mainly due to the lower cost of private road transport, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) in joint comments.
"Private road transport costs fell by 0.1 per cent after rising by 1.2 per cent in June, largely on account of the decline in Certificate of Entitlement (COE) premiums for cars," they said.
Accommodation costs declined too, by 2.8 per cent (following the 2.6 per cent drop in the previous month), reflecting the continued softening of the housing rental market.
In contrast, the higher core inflation reading was largely due to the more moderate decline in electricity tariffs and higher services inflation, said MAS and MTI.
Services inflation was at 0.6 per cent in July compared to June's 0.5 per cent, due to a rise in educational course fees and holiday travel costs.
Food inflation edged down to 1.9 per cent from 2 per cent a month earlier, owing to smaller price increases for non-cooked food items and hawker food.
MAS and MTI reiterated their full-year inflation forecasts, saying: "For 2015 as a whole, core inflation and (headline) inflation are projected to come in at the lower half of the forecast range of 0.5-1.5 per cent and -0.5-0.5 per cent respectively."