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Singapore Consumer Prices Fall Further

Singapore's consumer prices declined further in May, data from the Monetary Authority of Singapore and the Ministry of Trade and Industry showed on Tuesday.

The consumer price index fell 0.8 percent year-on-year in May, following a 0.7 percent decrease in February. Economists had expected a 1.0 percent decline.

The fall was driven by a decrease in private transportation cost that fell 6.8 percent after a 5.5 percent slump in the previous month.

MAS core CPI, which excludes the costs of accommodation and private road transport, fell 0.2 percent in May, following a 0.3 percent decline in the preceding month. Economists had forecast a 0.4 percent decline.

The fall in the core CPI was attributed to a smaller decline in costs of services, electricity and higher food inflation.

Food inflation accelerated to 2.2 percent from 2.1 percent. Services costs declined 0.8 percent after a 1.1 percent fall.

The government expects external sources of inflation to remain benign and weak in the coming quarters, amid low oil prices that will weigh on energy prices.

Supply chain disruptions caused by Covid-19 could push up the prices on imported food prices.

Cost pressures are expected to remain low as some spare capacity in the economy emerges and inflation is seen subdued in coming months.

Both MAS Core Inflation and CPI-All Items inflation are forecast to average between -1 percent and 0 percent in 2020, the ministry and MAS said.

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