Inflation up 0.4% last month, cost of services rises
Consumer prices kept inching up last month, rising 0.4 per cent from a year earlier - an unchanged pace from August and in line with analyst expectations.
Costlier services offset a sharper decline in car prices and a slower increase in petrol prices, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry said in a joint report yesterday.
Services inflation rose 1.5 per cent last month from 1.4 per cent in August, mainly due to a faster pace of increase in telecommunication services fees. These more than offset a smaller rise in holiday expenses and a larger decline in airfares.
Private road transport inflation eased to 2.1 per cent from 2.6 per cent in August.
Accommodation costs fell by 3.9 per cent, the same rate of decline as in August, amid continued softness in the housing rental market.
Food inflation was 1.2 per cent last month, the same as in August.
The MAS core inflation measure rose to 1.5 per cent last month from 1.4 per cent in August, because of higher services inflation. This was slightly higher than the 1.4 per cent increase tipped by analysts.
Dr Tan Khay Boon, a senior lecturer at SIM Global Education, noted that the mild increase in prices from a year ago, the stagnation between August and September as well as month-on-month zero inflation rates show that headline inflation is still quite subdued here.
"Based on the headline inflation, there is less need for the MAS to adjust the exchange rate appreciation path at the current stage," he said. "However, the core inflation shows a relatively larger amount of 1.5 per cent, implying that the higher prices of food, healthcare and education may begin to exert more pressure on low-income households."