Singapore Deflation Deepens in August



Singapore consumer prices dropped 0.8 percent year-on-year in August of 2015 from a 0.4 percent decline in the previous month and missing market consensus. It is the biggest year-on-year fall since late 2009, mainly due to a decline in cost of housing & utilities, household durables & services and transport while cost of food was steady.

Year-on-year, downward prices pressures came from: housing & utilities (-3.6 percent in August from -3.5 percent in July, largely due to a 8.4 percent drop in fuel & utilities and a 2.9 percent fall in accommodation); household durables & services (-2.2 percent from -2.0 percent, mainly due to a  2.8 percent decline in household services & supplies and a 1.3 percent drop in household durables) and transport (-2.3 percent from +0.1 percent, mainly due to a 2.9 percent decline in private road transport and a 3.4 percent fall in other travel & transport). Cost also declined for: clothing & footwear (-0.9 percent from +0.8 percent); health (-0.5 percent from -0.4 percent, mainly due to a 0.7 percent drop in medical & dental treatment); communication (-0.2 percent from -0.2 percent) and miscellaneous goods & services (-0.4 percent from -0.7 percent, mainly due to a 0.2 percent decline in  personal care, a 0.1 percent drop in alcoholic drinks & tobacco and a 2.5 percent decline in personal effects. In contrast, upward prices pressures came  from recreation & culture (+0.4 percent from +0.3 percent, mainly due to a 1.6 percent increase in newspapers, books & stationery and a 0.8 percent rise in holiday expenses) and education (+3.7 percent from +3.6 percent).

Prices of food remained steady at 1.9 percent, compared to the previous month. Among food, cost of food excluding food servicing services increased by 0.8 percent, following a 0.8 percent decrease in the preceding month while food servicing services rose 2.5  percent, up from 2.4 percent in July 2015. Among food excluding food servicing services, prices increased  for bread & cereals (+1.2 percent); milk, cheese & eggs (+1.5 percent); fruits (+2.9 percent); vegetables (+0.3 percent); sugar, preserves & confectionery (+3.0 percent) and other food (+1.3 percent). In contrast, prices declined for meat (-0.3 percent); oils & fats (-1.5 percent) and non-alcoholic beverages (-0.3 percent). Among food servicing services, while prices of catered food declined by 0.2 percent, prices increased for other components: restaurant foods (+4.1 percent), fast food (+1.5 percent) and hawker food including food courts (+1.7 percent).

Core inflation, which excludes costs of accommodation and private road transport, recorded at 0.2 percent year-on-year, slowing from 0.4 percent in July.

On a month-on-month basis, consumer prices rose 0.1 percent in August, following a 0.4 percent fall in the previous month. Price rose the most for housing & utilities (+1.2 percent), followed by clothing & footwear (+0.8 percent), education (+0.7 percent) and miscellaneous goods & services (+0.3 percent). In contrast, prices declined for household durables & services (-0.1 percent) , transport (-2.0 percent) and recreation & culture (-0.1 percent).

During January to August 2015, consumer prices dropped 0.4 percent.

Singapore Deflation Deepens in August


Statistics Singapore l Rida Husna | rida@tradingeconomics.com
9/23/2015 6:54:03 AM