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Singapore inflation edges up to -0.4% in May
AS expected, Singapore's headline inflation rate stayed in negative territory for the seventh straight month in May, although it edged up to -0.4 per cent from -0.5 per cent in April.
Core inflation continued to ease; it was at 0.1 per cent in May compared to 0.4 per cent in the previous month.
Headline inflation inched up due to the higher cost of private road transport. The -0.4 per cent headline figure was exactly in line with the median forecast of 17 economists polled by Bloomberg before the Department of Statistics released the data on Tuesday.
Private road transport costs rose by 1.0 per cent, after falling by 2.1 per cent in April, due to higher Certificate of Entitlement (COE) premiums and a smaller correction in petrol pump prices compared to a year ago.
Reflecting the soft housing rental market, accommodation costs fell by 2.5 per cent in May, similar to the previous month.
Both services and food inflation eased last month - the former to 0.5 per cent from 1.1 per cent in April, and the latter to 1.8 per cent from 2.1 per cent.
This resulted in a moderation in core inflation.
Said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) in joint comments: "Core inflation, which excludes the costs of accommodation and private road transport, came in at 0.1 per cent, compared to 0.4 per cent in the previous month. This mainly reflected the impact of budgetary measures on services costs, as well as softer food inflation."
Both MAS and MTI reiterated official forecasts for 2015: Headline inflation and core inflation are projected to average -0.5 to 0.5 per cent, and 0.5 to 1.5 per cent respectively.