Singapore sees 0.4% deflation in July

Costs of electricity and gas and food saw a steeper decline.

MAS core inflation dipped to -0.4% YoY in July, from a 0.2% decline in June, according to data from the Monetary Authority of Singapore, mainly driven by a steeper decline in the cost of electricity and gas as well as lower food inflation.

CPI‐all items inflation came in at ‐0.4% YoY in July, easing slightly from ‐0.5% in the previous month. This was due to a smaller decline in private transport costs, which relaxed from -4.4% in June to -2.1% in July.

Meanwhile, the decline in services cost eased in July as holiday expenses and airfares fell at a slower pace, whilst telecommunication services cost rose more rapidly. The cost of retail and other goods also recorded a smaller decline in July as the prices of telecommunication equipment rose. Prices of household durables and personal care products likewise moderated.

Accommodation inflation eased marginally in the same month due to a slower pace of increase in housing rents, whilst food inflation edged down as non‐ cooked food cost fell, even as food services inflation remained broadly unchanged.

Lastly, the cost of electricity and gas saw a much sharper drop in July, mainly due to a steeper decline in electricity prices as the tariff was revised downwards.