SINGAPORE: Singapore consumer prices rose for the sixth straight month in June, as higher transport and housing costs offset the steeper fall in the cost of retail and other goods.
Headline inflation of 2.4 per cent was unchanged from the reading in May, though it missed the median increase of 2.5 per cent forecast in a private-sector Bloomberg poll.
The Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on Friday raised their official forecast for all-items inflation to between 1 per cent and 2 per cent in 2021, up from the range of 0.5 per cent to 1.5 per cent before.
The forecast for core inflation was kept unchanged, at zero to 1 per cent.
“Uncertainty in the economic outlook will weigh on consumer sentiment and hence (the) price increases in the near term,” the MAS and MTI said in a joint statement.
Still, they added: “While there is the risk that inflation could persist in some of Singapore’s major trading partners, this would be tempered by the continued negative output gaps in many of these economies, which should help to moderate Singapore’s overall import price inflation.”
Headline inflation is also expected to ease in the latter part of the year, they said.
Accommodation costs rose 1.1 per cent, against 0.9 per cent in May, on faster growth in rents.
Both private transport and accommodation expenses are excluded from the core inflation indicator, which influences the MAS’s exchange rate-based monetary policy.
But gains in these categories offset declines or slower price increases elsewhere, and thus kept all-items inflation elevated.
That’s mainly as the cost of retail and other goods fell by a sharper 1.8 per cent in June, compared with 0.8 per cent in May, thanks to a steeper decline in the prices of clothes (-8.7 per cent) and shoes (-10.4 per cent).
Khoon Goh, head of Asia research at ANZ, called these decreases “the main source of downside surprise” for the lower-than-expected inflation print.
Services inflation was flat on the month before, at 1.4 per cent, as price hikes for services such as tuition offset the slower growth in point-to-point transport fares.
Food inflation retreated to 0.9 per cent in June, from 1.0 per cent in May, as the price increase for non-cooked food items receded.
Electricity and gas costs declined 1.8 per cent in June, compared with 1.9 per cent the month before, on slower take-up of liberalised electricity market plans.