Singapore’s annual CPI falls for first time in 13 years

With economists anticipating core inflation to be just 2.1 per cent in the December quarter from a year earlier, and up 0.5 per cent in the final three months of the year, it’s clear there are no immediate threats of a price breakout. “On the domestic front, some wage cost pressures remain, but their pass-through to consumer prices will be constrained by the subdued economic growth environment”, they said. However, inflation increases were weighed down by fuel price falls, down 5.7 per cent during the quarter, and prices for telecommunications and fruit.

Last month, the All-Items CPI fell 0.6 per cent from a year ago, slowing from the 0.8 per cent drop in November, due to a pick-up in petrol pump prices and the overall price of services.

“The trimmed mean and core measures both held steady, at 2.1 per cent and 2.3 per cent respectively, while the weighted median measure fell from 2.1 per cent to 1.9 per cent”. For the whole of 2015, MAS Core Inflation eased to 0.5 per cent, from 1.9 per cent in the preceding year.

Core inflation, which excludes private transport and accommodation costs, accelerated to 0.3% last month.

CPI All-Items inflation is projected to average between -0.5 and 0.5 per cent in 2016, according to the release.

They added that consumer prices could continue to be dampened by lower auto prices and imputed rentals on OOA, “due to an expected increase in the supply of COEs and newly-completed housing units”. On Monday, the MAS and Trade and Industry Ministry cited “significant uncertainty” over the outlook for global oil prices this year.

CommSec’s Savanth Sebastian said “the door remains ajar” for another interest rate cut, but it will not be due to inflation data. At the same time, food inflation eased to 1.5 percent from 1.6 percent.

The consumer price index rose 0.4 per cent in the quarter, beating market expectations, figures from the Australian Bureau of Statistics on Wednesday showed.

Inflation for all of previous year came in at negative0.

The central bank’s board meets February 2, and will publish new economic forecasts shortly after.