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Chart of the Day: Inflation eased to 4% in October

Source: Department of Statistics

Accommodation and private road transport costs account for the bulk.

The Monetary Authority of Singapore and the Ministry of Trade and Industry jointly reported:

CPI-All Items inflation eased to 4.0% in October from 4.7% in September 2012. This was largely due to smaller increases in the costs of private road transport and accommodation.

Private road transport cost rose by a more moderate 8.3% in October from 10.8% in the preceding month, reflecting the correction in COE premiums in September. The smaller increase in private road transport cost accounted for more than half of the 0.7% point fall in CPI-All Items inflation in October, as compared to a month ago.

Accommodation cost inflation was 6.8% in October, lower than the 7.7% in September. The moderation was largely due to the dissipation of the base effects associated with the Service & Conservancy Charges (S&CC) and HDB rental rebates. The contribution of imputed rentals on owner-occupied accommodation (OOA) to overall inflation also declined marginally to 1.3% points.

Together, accommodation and private road transport costs continued to account for close to two-thirds of CPI-All Items inflation in October.

Food inflation edged down to 1.7% in October from 2.1% in September. Price increases of both non-cooked food and prepared meals weakened to below 2% in October, from 2.3% and 2.0% respectively in September.

Prices of oil-related items in the CPI also rose at a slower pace in tandem with the moderation in global crude oil prices.

However, services inflation inched up to 3.1% in October, from 3.0% in September, on account of a stronger pickup in the costs of holiday travel and household services.

Inflation as measured by CPI less imputed rentals on OOA (CPI-ex OOA) eased to 3.3% in October from 3.9% in September, reflecting more moderate increases in the costs of private road transport, food and oil-related items as well as the dissipation of the base effects from the S&CC and rental rebates.

Excluding the costs of accommodation and private road transport, MAS Core Inflation fell to 2.2% in October from 2.4% in September as stronger services inflation was more than offset by lower contributions from food and oil-related items.

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