Singapore consumer inflation surprisingly falls in October, to pick up in mid-2017

Consumer inflation in Singapore unexpectedly fell during the month of October; however, prices fell by the smallest margin in two years, signaling that the longest streak of negative inflation in the country has bottomed out, following an easing in global energy prices.

Singapore’s consumer price index edged down by 0.1 percent year-over-year in October, following a 0.2 percent drop in September, data released by the Monetary Authority of Singapore and the Ministry of Trade and Industry showed Wednesday; economists had expected prices to remain flat during the month.

Further, food inflation eased to 1.9 percent in October from 2.2 percent a month ago. Similarly, services inflation moderated to 1.4 percent from 1.5 percent. Private road transport cost showed no variations in October, after a 0.4 percent fall in the prior month. This largely reflected a smaller drop in petrol prices and a moderation in the decline of car prices.

MAS core inflation that excludes the costs of accommodation and private road transport, accelerated to 1.1 percent in October from 0.9 percent in September. Month-on-month, consumer prices declined 0.3 percent in October, after remaining flat in the preceding month.

For the whole of 2016, MAS core inflation is expected to average around 1.0 percent before rising to 1-2 percent next year as energy related components begin to contribute positively to inflation and temporary disinflationary effects from budgetary measures fade, reports said.

However, consumer prices are expected to rise in the mid-2017 to around 1-2 percent, as oil and other energy-related components are to contribute positively to pull the country out of deflation.