Consumer prices in Singapore last month rose at their slowest pace in 20
months, lifting hopes that inflation may have peaked and is on the way down.
The consumer price index (CPI)
increased 4 per cent in July - the lowest figure since November 2010 - down
sharply from its 5.3 per cent rise in June.
Inflation had been stubbornly
hovering around the 5 per cent mark for about 18 months.
Price rises for cars and housing,
two of the biggest contributors to inflation over the period, finally slowed
last month.
Housing prices rose 6.4 per cent,
the slowest rate in 14 months, while transport prices grew 5.7 per cent, down
from 8.7 per cent in June, the Department of Statistics said yesterday.
Prices of everyday goods and
services, which include education and recreation, also rose at a slower pace,
said the Trade and Industry Ministry and the Monetary Authority of Singapore
(MAS).
Core inflation, which excludes
accommodation and private road transport, fell to 2.4 per cent last month from
2.7 per cent in June. Food price inflation held steady at 2.3 per cent last
month, unchanged from June.
Economists said they were not
surprised at the development, noting that the sluggish economy is taking the
sting out of inflation.
OCBC economist Selena Ling said
wages are unlikely to rise as quickly as they did over the past year, while
business costs, such as rents, could ease off. "It's really a function of
a slowing economy that these price pressures are finally weakening."
The MAS expects inflation for the
whole year to come in at between 4 per cent and 4.5 per cent, while core
inflation should be 2.5 per cent to 3 per cent.
A fall in certificate of
entitlement (COE) prices in yesterday's bidding exercise is also likely to mean
weaker inflation ahead, said analysts.
But while the CPI is expected to
fall, economists warn that there may be some volatility ahead. They noted that
COE prices could jump, with cutbacks in supply, and this could push inflation
up again.
Bank of America Merrill Lynch
economist Chua Hak Bin noted the cost of some items is likely to stay high and
may even rise. Health-care costs, for instance, bucked the general trend of
falling inflation and rose 5.1 per cent last month, from 4.6 per cent in June.
"But overall, inflation
should creep downwards," he said.
Countries across Asia have also
seen inflation fall in recent months, as a result of a weakening global
economy.
Singapore's economy is expected
to grow by between 1.5 per cent and 2.5 per cent this year. The economy shrank
0.7 per cent in the second quarter from the first three months of the year.
Said Chua: "It is clear that
concerns are tilting towards slowing growth, rather than inflation."
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com
No comments:
Post a Comment