RTTNews - Consumer prices in Singapore dropped for the second consecutive month in May, although at a slower pace, owing mainly to lower transport and communication costs, an official report showed Tuesday.
Data released by the Department of Statistics said consumer prices fell 0.3% year-on-year in May, after falling 0.7% in April. Economists expected prices to decline 0.9%. In April, consumer prices recorded their first fall in about four years.
In May, transportation and communication prices, with the second highest weight in the index, dropped 5.8%, reflecting lower petrol and car prices as well as road tax. Moreover, recreation prices dropped 0.2% and education and stationery prices were down 0.4%. At the same time, food prices rose 2.6%, and housing prices were up 0.7%. Excluding accommodation costs, consumer prices were down 1.5% in May.
Month-on-month, consumer prices rose 0.6% in May, after falling 1.1% in the preceding month. Consumer prices increased mainly due to a 2.9% rise in housing costs. Excluding accommodation costs, consumer prices remained unchanged in May. Meanwhile, the seasonally adjusted consumer price index rose 0.8% from April.
Earlier this month, the Monetary Authority of Singapore or MAS in a report titled 'Recent Economic Developments in Singapore' said the headline inflation would remain negative for the rest of the year, partly due to a high base last year. At the same time, the underlying inflation is expected to be slightly higher as it excludes price of petrol and cars, which are likely to be lower this year, the MAS said. The monetary authority kept the inflation forecast unchanged at minus 1%-0% for the year.
On a sequential basis, the consumer price index is expected to decline only in the first two quarters of the year, and start rising in the second half, in line with recovery in global oil prices. There was little likelihood at this point of time of a persistent and broad based drop in consumer prices, the MAS added.
Meanwhile, the MAS noted that the Singapore economy was unlikely to stage a decisive rebound this year. With the world economy and financial system remaining fragile, Singapore's climb out of recession will be slow and gradual, the central bank said.
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