SINGAPORE: Inflation in Singapore has eased to the
lowest in almost two years, reflecting more moderate increases in
accommodation cost and services fees.
The consumer price index for all items in August
edged down slightly to 3.9 per cent compared to 4 per cent in
July.
Accommodation cost inflation slowed to 7.4 per cent
from 7.8 per cent in July as residential property rentals rose at a
more moderate pace, while private road transport cost rose 6.3 per
cent in August due to pump prices.
Car prices climbed more moderately as compared to July.
Food price inflation remained stable at 2.3 per cent.
However, economists warned that transport and accommodation costs
will continue to keep inflation elevated.
Joey Chew, economist at Barclays Bank PLC, said: "September
inflation might rise to above 4 per cent again. I think the key
reason is due to certain idiosyncratic factors such as base effect
from the discontinuation of service and conservancy rebates... and
second thing is the volatility of COE premiums. But, you are right
that the quantitative easing (QE) does play a factor, although I
think the volatility effects from QE will factor in closer to the
end of the year."
In a statement, the Monetary Authority of Singapore and the Trade
and Industry Ministry said headline inflation is expected to rise
in September.
This is largely due to a "surge" in the cost of Certificates of
Entitlement (COE) for motor vehicles in August.
However, lower global commodity prices will contain domestic oil
and food inflation in the near term.
For the year, the authorities said inflation will stay elevated and
average 4 to 4.5 per cent.
- CNA/cc