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Singapore's CPI contracted further in January

Xinhua, February 23, 2015 Adjust font size:

The consumer price index (CPI) inflation in Singapore in January fell 0.4 percent year on year, following the 0.1 percent contraction in the previous month, Singapore's Department of Statistics said on Monday.

The Ministry of Trade and Industry and the Monetary Authority of Singapore (MAS) attributed the contraction mainly to account of sharper price declines in direct oil-related items as well as lower food and services inflation.

Prices of direct oil-related items decreased further by 13.6 percent in January, after falling by 7.4 percent in the preceding month. MAS attributed the decline to further drop of petrol pump prices and electricity tariffs following the correction in global oil prices.

Food inflation moderated to 2.2 percent in January from 2.7 percent in December last year, as a result of the high base in January 2014 when food prices rose significantly during the Chinese New Year festive period.

The cost of private road transport fell by 5.0 percent, compared to the 5.3 percent drop in the previous month, owing to a smaller correction in car prices.

Overall services inflation slowed to 1.2 percent while the cost of accommodation dropped by 1.9 percent in January.

The core inflation, which excludes changes in the price of private road transport and accommodation, came in at 1.0 percent in January compared to 1.5 percent in December, due to the cut in electricity tariffs as well as the fall in food and services inflation, MAS said.

According to MAS, external price developments are expected to be generally benign, given ample supply buffers in the major commodity markets. At the same time, while domestic cost pressures will remain, the extent to which businesses will pass on accumulated costs to consumer prices could be constrained in the near term by the moderate economic growth environment.

Therefore, MAS said the inflation is expected to come in at -0. 5 to 0.5 percent this year, while core inflation is expected to stay elevated at 0.5 to 1.5 percent. Endi