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Singapore's consumer prices continue to fall in March

Xinhua, April 23, 2015 Adjust font size:

Singapore's consumer price index (CPI) came in at -0.3 percent year on year in March, the fifth consecutive month it experienced deflation, according to a joint press release by the Ministry of Trade and Industry (MTI) and the Monetary of Authority of Singapore (MAS) on Thursday.

MTI and MAS said that while food inflation eased and accommodation cost fell more steeply, the decline in private road transport cost was more modest.

Inflation in food prices moderated to 2.1 percent from 2.5 percent in February, on account of a slower rise in non-cooked food prices as demand eased after the Chinese New Year, while services inflation was stable at 1.5 percent, as the sharper increase in telecommunication services fees was offset by a decline in air fares and a smaller pick-up in hospitalization charges.

Accommodation cost was 2.2 percent lower in March, extending the 2.1 percent decline in the previous month, as the housing rental market continued to soften, the release explained.

Private road transport cost fell by a more moderate 4.0 percent in March, compared to the 5.8 percent drop in February, following the increase in petrol duty rates.

The core inflation monitored by the central bank, which excludes the costs of accommodation and private road transport, fell to 1 percent in March from 1.3 percent in February, mainly reflecting the lower food price inflation, it said.

Looking forward, the MAS said external sources of inflation should remain generally benign, given ample supply buffers in the major commodity markets. Although underlying cost pressures stemming from the tight labor market remain, the pass-through to consumer prices could be constrained in the near term by the moderate growth environment.

The core inflation and headline inflation could ease further before rising towards the end of the year and into 2016, as global oil prices pick up and the effects of the enhanced medical subsidies fade.

For 2015, MAS expects the full-year headline inflation at -0.5 to 0.5 percent, while core Inflation to remain between 0.5 to 1.5 percent, respectively. Endi