Consumer prices extend losing streak with 0.6% drop in January

Due to lower services inflation.

Consumer prices in Singapore extended their slump with a 0.6% contraction in January, marking the 15th consecutive month of negative inflation in the city-state.

Data released by the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) show that consumer prices dropped mainly due to a moderation in services inflation and a sharp decline in car prices.

Overall services inflation moderated to 0.5% in January from 0.9% a month earlier, largely due to a slower pace of increase in education services fees and holiday travel costs.

Private road transport cost was 1.8% lower, extending the 1.1% decline in December, as the sharper fall in car prices amid weaker Certificate of Entitlement (COE) premiums more than offset the faster pace of increase in petrol pump prices.

The cost of oil-related items fell at a slower rate of 3.2% in January compared to the 7.0% decline in the previous month, mainly due to a smaller drop in electricity tariffs, which reflected the low base in January last year.

Accommodation cost declined by 3.1% in January, after falling by 3.0% in the previous month, reflecting the soft housing rental market.

Meanwhile, MAS Core Inflation, which excludes the costs of accommodation and private road transport, rose to 0.4% in January from 0.3% a month ago. 

This was mostly on account of the smaller reduction in electricity tariffs and higher food and retail goods inflation, which more than offset the fall in services inflation.