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Consumer prices projected to dip in 2016: MAS, MTI
THE Singapore government expects headline inflation to come in "around -0.5 per cent" in 2016, and for this to pick up to 0.5 to 1.5 per cent in 2017.
The Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) gave these projections alongside September's inflation data release on Monday.
They added that core inflation - which excludes the cost of accommodation and private road transport - will rise to 1 to 2 per cent next year, and reiterated that for 2016, core inflation is expected to average around 1 per cent.
"Domestically, overall cost pressures should be muted. Amid a pullback in hiring, conditions in the labour market have slackened. This will cap underlying wage growth, even as non-labour business costs have eased," said MAS and MTI.
Singapore's headline inflation rate stayed in negative territory for the 23rd straight month in September, coming in exactly in line with expectations for a -0.2 per cent year-on-year reading.
This was a slightly smaller decline from August's -0.3 per cent, and was mainly due to a more modest fall in private transport cost.
This fell by 0.4 per cent - easing from August's 1 per cent decline. This was mostly due to a smaller drop in petrol prices.
Core inflation eased marginally to 0.9 per cent in September, from 1 per cent in August. This was largely on account of lower services inflation, which more than offset the stronger pick-up in food prices.
Services inflation moderated to 1.5 per cent from 1.7 per cent a month earlier - reflecting a fall in public road transport cost, as well as a smaller increase in telecommunication services fees.
"Public road transport cost fell by 0.7 per cent in September, following the 0.9 per cent increase in August. The increase in August was due to the low base a year ago when public transport operators provided free bus and train services on National Day in conjunction with the SG50 celebrations," said MAS and MTI.