Food prices increased by a slower 1.0 percent in January, compared with 1.5 percent in December, mainly on account of the higher base in January 2012 due to the seasonal rise in food prices during the Chinese New Year. Prices of oil-related items fell by 1.4 percent, the first y-o-y decline since December 2009. This reflected the weakness in global oil prices towards the end of 2012. Services inflation edged down to 1.9 percent in January from 2.5 percent in the previous month, led by more moderate increases in the costs of public road transport and medical treatment as well as the decline in holiday travel cost.
Inflation as measured by CPI less imputed rentals on owner-occupied accommodation (OOA) was 2.9 percent in January, down from 3.8 percent in the month earlier. This was led by more moderate increases in the costs of services and food, the decline in prices of oil-related items as well as the dissipation of the base effects associated with the S&CC and rental rebates.
In line with expectations, MAS Core Inflation, which excludes the costs of accommodation and private road transport, fell from 1.9 percent in December 2012 to 1.2 percent in January 2013, with lower contributions from all its major components.