Singapore headline inflation falls more than expected to 0.5% in June

SINGAPORE'S headline inflation fell more than expected to 0.5 per cent in June, from 1.4 per cent in the preceding month and a market consensus of 0.7 per cent.

This was due to sharply lower housing and maintenance and repairs inflation associated with the timing effects of the disbursement of service and conservancy charges rebates, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry in a joint release on Monday.

Private sector economists polled by Bloomberg have expected year-on-year all-items consumer price index (CPI) to be at a median estimate of 0.7 per cent.

Core inflation, which strips out private road transportation costs and accommodation, edged down to 1.5 per cent from 1.6 per cent, due to lower services and food inflation.

Private road transport inflation slowed to 3 per cent in June from 6.1 per cent in the previous month, mainly due to a decline in car prices and smaller petrol price increases.

Food inflation eased to 1.4 per cent in June from 1.5 per cent in May, as the rate of increase in prices of non-cooked food items moderated.

Meanwhile, prices of prepared meals continued to rise at a stable pace.

Services inflation edged down to 1.3 per cent in June from 1.4 per cent in May, due to a decline in telecommunications services fees.

For 2017, core inflation is expected to average 1-2 per cent, compared with 0.9 per cent in 2016. CPI-All Items inflation is projected to rise to 0.5-1.5 per cent from -0.5 per cent last year.

"The projected pickup in inflation can be attributed to the positive contribution of energy-related components and the impact of administrative price increases, rather than generalised demand-induced price pressures," said the joint statement.