Singapore consumer prices last month continued their 22-month slide, though the rate of decline eased from recent months.
The consumer price index (CPI), a measure of inflation, dipped 0.3 per cent last month compared to its 0.7 per cent drop in July, according to Statistics Department data. That is the smallest year-on-year drop in CPI since June last year, when CPI also fell by 0.3 per cent.
Core inflation, which strips out accommodation and private road transport costs to better gauge everyday expenses, ticked up 1 per cent, unchanged from July, as higher services inflation offset the more modest increase in food prices.
Singapore is experiencing its longest stretch of negative inflation since 1977. The CPI has been falling on an annual basis since November 2014, hit by lower global oil prices as well as falls in housing rents and private transport costs. However, core inflation is expected to pick up gradually over the course of the year as the disinflationary effects of oil as well as budgetary and other one-off measures ease.
“The pace of increase will be restrained by the weak external price outlook, subdued economic growth prospects, and the reduction in labour market tightness,” according to the Monetary Authority of Singapore and Ministry of Trade and Industry.
The prediction is that the all-items CPI hit bottom in the second quarter and will rise in coming months. For core inflation, the government expects this to average around 1 per cent this year.
Most prices in the economy continued to edge upward, except for clothing and footwear costs which dropped by 1.9 per cent.
Food inflation eased slightly to 2 per cent in August, from 2.1 per cent in July. This was because of a smaller increase in the cost of non-cooked food, which more than offset the stronger pick-up in the price of restaurant meals.