Singapore headline inflation falls for 18th straight month, slowest since July 2015

Singapore April headline inflation fell for the 18th consecutive month, albeit at the slowest pace since July 2015, marked by slow pace in transport, household & utilities and communications. There was also a low base in April 2015 due to the disbursement of S&CC rebates then, OCBC Bank reported.

The drag from transport , largely private road transport at -5.4 pct y/y, with household & utilities declining 1.9 pct, attributable mostly to fuel & utilities and decline in communications by 1.9 pct were partly mitigated by price increases for education (+3.1%, mainly tuition fees & other fees). Effects of the waiver of national examination fees last April faded, however. Food prices rose 2.3 pct, mainly fish & seafood and vegetables, clothing & footwear jumped 1.8 pct and healthcare surged 1.1 pct, mainly medical & dental treatments.

MAS core inflation eased from 0.6 pct y/y in March to 0.5 pct in April, as services inflation picked up from 0.4 pct to 0.7 pct amid more costly holiday travel and domestic services expense. 

"Our view is that headline inflation may attempt to bottom in 2Q16, but stay subdued for the rest of the year due to the continuing drag from disinflationary asset prices and notwithstanding the slight uptick in global crude oil prices," said Selena Ling, Head of Treasury Research & Strategy, OCBC Bank.