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Update: Singapore's July inflation at -0.7%, core inflation at 1%

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SINGAPORE'S headline inflation rate stayed in negative territory for the 21st straight month in July, at -0.7 per cent from a year ago - the same as June's reading.

SINGAPORE'S headline inflation rate stayed in negative territory for the 21st straight month in July, at -0.7 per cent from a year ago - the same as June's reading.

Core inflation (which excludes the costs of accommodation and private road transport) eased marginally to one per cent in July from 1.1 per cent in the month before, owing to a fall in the overall price of retail items.

The Department of Statistics released the latest inflation data on Tuesday.

While the core inflation reading was exactly in line with the market's forecast, the contraction in headline inflation was slightly larger than private-sector economists had expected. The 19 economists polled by Bloomberg had been expecting an overall figure of -0.5 per cent.

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Among the segments, housing & utilities, transport, and clothing & footwear posted negative readings in year-on-year terms - of -4.3 per cent, -3.5 per cent and -1.8 per cent respectively.

Readings of all other segments were in positive territory, with education the highest at 3.6 per cent, followed by household durables & services at 3.2 per cent and food at 2.1 per cent.

Still, overall services inflation was 1.6 per cent, unchanged from June.

"While the cost of education services rose more sharply, this was offset by a slower pace of increase in holiday travel expenses," said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) in a joint statement.

They added that the cost of electricity, liquefied petroleum gas & gas fell by a more moderate 12.7 per cent compared to June's 13.7 per cent decline. This was due to a smaller decrease in electricity tariffs on a year-ago basis.

MAS and MTI reiterated their inflation forecasts for 2016: Headline inflation is projected to come in at -1 per cent to flat, while core inflation is expected to average around one per cent.

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