Inflation in Singapore eased to its weakest level in 21 months in August, mainly reflecting more moderate increases in accommodation cost and services fees, data released by the Ministry of Trade and Industry and the Monetary Authority of Singapore (MAS) revealed Monday.
The consumer price index (CPI) rose 3.9 percent year-on-year in August, after climbing 4 percent in the previous month. It was the lowest rate of inflation since November 2010, but a tad above economists' forecast of 3.8 percent.
The rate of increase in accommodation costs slowed to 7.4 percent year-on-year in August from 7.8 percent in July as residential property rentals rose at a more moderate pace. However, imputed rentals on owner-occupied accommodation continued to contribute a considerable 1.4 percentage points to overall inflation.
Nevertheless, the ministry expects the overall CPI inflation to stay elevated at an average 4-4.5 percent in 2012. Notably, the inflation rate is expected to rise in September due to the surge in Certificate Of Entitlement (COE) premiums in August, as well as the base effects associated with the disbursement of government rebates.
The government forecasts COE premiums to remain sharply higher than a year ago for the rest of 2012, while imputed rentals will also continue to add significantly.
The core inflation measure monitored by the MAS, which excludes accommodation and private road transport, rose 2.2 percent from a year earlier.
According to a quarterly survey of Professional Forecasters by MAS, the CPI may rise 4.4 percent this year and 3.2 percent next year.
Food price inflation was stable at 2.3 percent in August, while the increase in services fees eased to 2.7 percent from 2.8 percent in July. Private road transport cost rose 6.3 percent annually, slightly faster than the 5.9 percent in the preceding month.
Petrol pump prices increased in August after two consecutive months of decline, but car prices climbed more moderately compared to that in July.
On a monthly basis, the CPI rose 0.6 percent. MAS core inflation measure rose 0.2 percent compared to July.
by RTT Staff Writer
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