Inflation slides 0.8% in August as COE premiums plunge

After slipping 0.4% in July.

The continued softening of Certificate of Entitlement (COE) premiums caused consumer prices in Singapore to dip 0.8% in August, much more severe than the 0.4% dip in July.

August's inflation reading, released today by the Ministry of Trade and Industry (MTI), only pushed Singapore deeper into its longest stretch of deflation since the Global Financial Crisis.

Private road transport cost decreased by 2.9% following the 0.1% fall in July, as a result of the high base a year ago when COE premiums for cars saw a sharp increase, as well as the one-year road tax rebates for petrol vehicles.2

Accommodation cost declined by 2.9%, extending the 2.8% drop in the previous month, as the housing rental market continued to soften.

Services inflation edged down to 0.5% in August compared to 0.6% in July, largely on account of the smaller increase in the cost of public road transport.

The cost of retail items fell by 0.6%, after coming in unchanged in July, mainly reflecting the decline in clothing & footwear prices.

Food inflation was 1.9%, unchanged from the previous month. Price increases for both non-cooked food items and prepared meals were broadly stable.