SINGAPORE: Singapore's inflation rate dropped to 4.0 per cent year-on-year in July from 5.3 per cent in June, according to a statement released by the Department of Statistics on Thursday.
The decline in the Consumer Price Index (CPI), a key gauge of inflation, was due to "more moderate increases in the costs of accommodation, private road transport and oil-related items", the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said in a joint statement.
On a year-on-year basis, accommodation cost inflation slowed from 10.8 per cent in June to 7.8 per cent in July.
This
was due largely to the timing of disbursements of rebates for service
and conservancy charges to HDB households, as well as a slowdown in the
increase in imputed rentals on owner-occupied accommodation from 9.8 per
cent in June to 9.0 per cent in July.
Private transport costs
added 0.8 per cent to the CPI, lower than the 1.3 per cent in the June
data, due to a slight moderation in car prices as COE premiums eased in
June. At the same time, petrol pump prices fell by 1.9 per cent on-year
in July.
Despite a slower rate of growth in the inflation,
accommodation and private road transport costs accounted for around 60
per cent of inflation on all items in July.
The year-on-year
increase in electricity tariffs slowed from 12.5 per cent in June to 2.9
per cent in July, while food and services inflation remained stable at
2.3 per cent and 2.8 per cent respectively.
Excluding the costs
of accommodation and private road transport, core inflation came in
lower at 2.4 per cent for July, falling from 2.7 per cent in June on
account of lower contribution from oil-related items.
On a month-on-month basis, overall CPI edged up 0.2 per cent after stabilising in the preceding month.
In
the joint statement, MAS and MTI said that due to the "generally
sluggish economic environment", the forecast for core inflation will be
slightly lower over the next few months and average between 2.5 and 3.0
per cent for the whole of 2012.
It added that CPI-All Items inflation was expected to remain elevated and average 4.0 to 4.5 per cent for the whole year.
This
is because of higher rental accommodation costs as leasing contracts
are renewed, especially in the HDB segment, and expectations that COE
premiums will remain sharply higher than in 2011 because of the low COE
supply.
- CNA/wm/al