Chart of the Day: Inflation down for sixth straight month by 0.5%

As prices fell in 6 out of 10 CPI sub-groups.

Singapore continues to be in a state of deflation amid property cooling measures and a weak global outlook, among other factors.

According to a report by Maybank Kim Eng, headline inflation rate in Apr 2015 fell YoY for the sixth consecutive month i.e. -0.5% (Mar 2015: -0.3% YoY) as prices fell in six out of the 10 CPI sub-groups. Headline inflation fell from the previous month by -0.6% MoM (Mar 2015: +0.2% MoM), after two consecutive MoM rises. For Jan-Apr 2015, headline inflation dropped -0.4% YoY.

Meanwhile, core inflation rate (CPI ex-accommodation and private road transport) was up by a slower +0.4% YoY (Mar 2015: +1.0% YoY), as food price increases moderated further to +2.0% YoY (Mar 2015: +2.1% YoY), attributed to the normalisation in demand after the Lunar New Year festive period. YTD, core inflation averaged +0.9% YoY.

Here’s more from Maybank Kim Eng:

Core inflation rate (CPI ex-accommodation and private road transport) was up by a slower +0.4% YoY (Mar 2015: +1.0% YoY), as food price increases moderated further to +2.0% YoY (Mar 2015: +2.1% YoY), attributed to the normalisation in demand after the Lunar New Year festive period. YTD, core inflation averaged +0.9% YoY

2015 inflation likely to be flat i.e. at the lower end of our 0%- 1.0% forecast, reflecting subdued outlook on “Transport” cost given the low crude oil price effect on fuel prices, the continued depressed “Housing & Utilities” cost as well as stable-to-soft global commodity prices, countering the labour cost impact of the tight job market.

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