Singapore inflation fall 0.8 per cent in Aug due to lower COEs

Singapore inflation fell 0.8 per cent in August compared to a 0.4 per cent slide in July, mainly due to the lower costs of private cars as Certificate of Entitlement (COE) premiums eased.

According to the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) on Wednesday, private road transport cost decreased by 2.9 per cent following the 0.1 per cent fall in July, as a result of the high base a year ago when COE premiums for cars saw a sharp increase, as well as the one-year road tax rebates for petrol vehicles.

Accommodation cost declined by 2.9 per cent, extending the 2.8 per cent drop in the previous month, as the housing rental market continued to soften.

Services inflation edged down to 0.5 per cent in August compared to 0.6 per cent in July, largely on account of the smaller increase in the cost of public road transport.

The cost of retail items fell by 0.6 per cent, after coming in unchanged in July, mainly reflecting the decline in clothing & footwear prices.

Food inflation was 1.9 per cet, unchanged from the previous month. Price increases for both non-cooked food items and prepared meals were broadly stable.

Inflation as measured by CPI less imputed rentals on owner-occupied accommodation (OOA) eased to -0.2 per cent in August, compared to 0.3 per cent in the previous month, largely due to the sharper decline in private road transport cost.

MAS Core Inflation, which excludes the costs of accommodation and private road transport, moderated to 0.2 per cent from 0.4 per cent in July, reflecting lower services and retail goods inflation.

For 2015 as a whole, MAS Core Inflation and CPI-All Items 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.