Photographer: Nicky Loh/Bloomberg

Singapore Consumer Prices Extend Longest Slump Since the 1970s

  • Consumer price index fell for 16th straight month in February
  • Housing & utilities, transport, communication costs fell

Singapore’s consumer prices fell for a 16th straight month, extending the longest streak of declines since 1977 amid a global oil-price slump.

Consumer prices declined 0.8 percent from a year earlier in February as transport, housing and communication costs fell further, data released in Singapore Wednesday showed. The median estimate in a Bloomberg News survey was for a 0.7 percent fall. Core inflation, which excludes private transport and accommodation costs, accelerated to 0.5 percent last month.

“The low oil prices will continue to weigh on the headline number, resulting in negative inflation,” DBS Group Holdings Ltd. said in a research note before the data release. “Beyond that, the cooling housing market is exerting downward pressure on
rentals.”

The economic growth slowdown has further compounded the disinflationary pressure, DBS said. “This will likely become more pronounced in the coming months with
overhanging risk of a technical recession.”

Authorities last month lowered Singapore’s inflation forecast for 2016 to -1.0 percent to 0 percent, from a previous range of -0.5 percent to 0.5 percent. The forecast for the MAS core inflation measure was kept at 0.5 percent to 1.5 percent.

“External sources of inflation are likely to remain muted given ample supply buffers in the major commodity markets and weak global demand conditions,” the central bank and trade ministry said in a statement accompanying the inflation report. “The pass-through of wage costs to consumer prices may also be tempered by the subdued economic
growth environment.”

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