Singapore's headline inflation eases to 0.1% in Oct, lowest since Dec '09

SINGAPORE'S headline inflation eased more than expected in October, slowing to 0.1 per cent last month from 0.6 per cent in September. This marks a new low since December 2009.

The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said in joint comments that this was "mainly on account of base effects associated with fluctuations in car Certificate of Entitlement (COE) premiums, as well as sharper declines in the costs of accommodation and oil-related items".

The median forecast of 13 economists polled by Bloomberg before the Department of Statistics (DoS) released the data on Monday was for a 0.6 per cent year-on-year rise in the consumer price index (CPI) - which would have been unchanged from September's pace.

Core inflation - which excludes the costs of accommodation and private road transport - eased to 1.7 per cent in October from 1.9 per cent a month ago, due to a steeper decline in electricity tariffs as well as lower food inflation.

Said MAS and MTI on the inflation outlook: "(Headline) inflation is expected to stay subdued amid the anticipated increases in the supply of car COEs and newly-completed housing units, and come in at 1-1.5 per cent in 2014 and 0.5-1.5 per cent in 2015."

They reiterated that domestic food inflation could "remain elevated" in the near term. MAS and MTI added that with the economy at full employment, wage pressures will continue to persist and filter through to the prices of various services items.

The government expects core inflation to average 2-2.5 per cent in 2014 and 2-3 per cent in 2015.