Singapore's inflation for the month of June moderated to 0.5 percent from 1.4 percent in the preceding month.
According to the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI), this moderation in consumer price index (CPI) is due to the sharp decline in the housing maintenance and repairs inflation.
The decline in housing costs is heavily associated with the timing effects of the disbursement of Service & Conservancy Charges (S&CC) rebates. This has contributed to the 3.9 percent slowdown in the cost of accommodation in June, larger than the 1.5 percent decline recorded in May.
On the other hand, the private road transport inflation moderated to 3.0 percent in June from 6.1 percent in the previous month, affected by the decline in car prices and smaller petrol price increases.
It was the same story with food inflation, which eased to 1.4 percent. This is due to the moderation of the rate of increase in the prices of non-cooked food items.
Meanwhile, services inflation edged down to 1.3 percent and the decline in telecommunications services fees was to blame.
According to OCBC economists Selena Ling and Barnabas Gan, MAS and MTI's inflation language remains benign, as external inflation pressures have picked up amidst a turnaround in global
commodity markets.
"In addition, administrative price adjustments are likely to contribute to a temporary increase in inflation this year, but domestic sources of inflation remain relatively muted and the subdued economic environment will limit the magnitude of cost-push inflation to end-consumers," the two economists said.
Looking forward, Ling and Gan noted that full-year CPI might only reflect 1 percent. whilst core-CPI is expected to reach 1.6 percent.
