Consumer prices fell more for Singapore households at the bottom in H2 2020

IN the second half of 2020, consumer prices fell more for the bottom fifth of households by income, according to a Department of Statistics (Singstat) statement on Monday.

The all-items consumer price index (CPI) fell 0.2 per cent year on year for the lowest 20 per cent, and fell 0.1 per cent for the other two income groups: the middle 60 per cent, and the highest 20 per cent.

Excluding imputed rentals on owner-occupied accommodation, the difference was greater: falling 0.4 per cent for the bottom fifth, 0.3 per cent for the middle, and 0.2 per cent for the top fifth.

The difference was due to lower-income households receiving higher subsidies for outpatient services, and greater falls in electricity costs as an electricity retailer gave rebates to existing customers in one and two-room public flats, said Singstat in its statement.

Higher car prices also had a smaller impact on the CPI for the bottom fifth, as cars have a smaller weight in that expenditure basket.

For the whole of 2020, headline inflation was -0.2 per cent, reversing from the positive figure of 0.6 per cent in 2019.

Unlike the second half alone, the highest income group saw prices fall the most, down 0.2 per cent. The other two income groups saw a 0.1 per cent fall.

But excluding imputed rentals on owner-occupied accommodation, all three income groups saw the same CPI decline of 0.3 per cent.

In both the second half of 2020, as well as the year as a whole, the decline in CPI was driven by lower prices of electricity, petrol, outpatient services, and clothing and footwear.

These declines more than outweighed the increase in prices of food, and bus and train fares.