Testing times: Inflation surged to 5.7% in August 2011

Blame it on higher costs of transport and housing which went up by 12.5% and 9.9%, respectively.

According to a release, compared with August 2010, the consumer price index rose by 5.7 per cent in August 2011. This was mainly attributed to higher costs of housing, transport and food. Housing cost increased by 9.9 per cent, on account of higher accommodation cost and electricity tariffs. The higher accommodation cost was largely contributed by higher imputed rentals of owner-occupied accommodation which has no impact on the cash expenditure of owner-occupied households.

The cost of transport went up by 12.5 per cent, mainly due to the significant increase in Certificate of Entitlement (COE) premiums compared to a year ago. Dearer prepared meals, fresh fish, dairy products & eggs as well as meat & poultry led to a 3.0 per cent increase in food prices. Excluding accommodation costs, the consumer price index was 4.4 per cent higher in August 2011 compared with the same period a year ago.

The consumer price index in January-August 2011 increased by 5.1 per cent compared with the same period last year. Excluding accommodation costs, the consumer price index rose by 4.2 per cent during the same period.

Month-on-Month Changes

The consumer price index in August 2011 increased by 0.7 per cent compared with July 2011, mainly due to higher costs of transport, housing, clothing & footwear as well as “recreation & others”. Transport cost went up by 1.6 per cent, owing to higher prices of cars. Housing cost rose by 0.7 per cent, as a result of higher accommodation costs and gas tariffs. On account of dearer ready-made garments and footwear, prices of clothing & footwear increased by 2.7 per cent. The 0.5 per cent increase in the costs of “recreation & others” stemmed mainly from higher holiday travel cost. Excluding accommodation costs, the consumer price index moved up by 0.7 per cent in August 2011.

Seasonally-Adjusted CPI

On a seasonally adjusted basis, the consumer price index was 0.5 per cent higher in August 2011. Excluding accommodation costs, the consumer price index crept up by 0.5 per cent in August 2011.

MAS Core Inflation Measure

On a month-on-month basis, the MAS core inflation measure (which excludes the costs of accommodation and private road transport) was 0.4 per cent in August 2011. On a year-on-year basis, the MAS core inflation measure was 2.2 per cent.