Singapore Consumer Prices Rise for First Time in 11 Months

SINGAPORE--Singapore's consumer prices rose for the first time in 11 months in January, driven by a pickup in core inflation and higher private-transport and accommodation costs.

The consumer-price index rose 0.2% last month from a year earlier, after being flat in December, the Department of Statistics said Tuesday. The CPI last rose in February 2020, up 0.3%. The median estimate from a Wall Street Journal poll of nine economists was for a 0.1% increase in January.

Food prices, which have a 21.10% weighting in the index, climbed 1.5% in January from a year earlier, the data showed.

The cost of transportation, which has an index weighting of 17.07%, rose 0.7%. The cost of housing and utilities, which makes up 24.84% of the index, dropped 0.3%. The cost of accommodation rose 0.5%.

Core CPI, which strips out private road transport and accommodation costs, fell 0.2% in January following the 0.3% decline in December. The median estimate in the WSJ poll was for a 0.2% drop.

In the quarters ahead, external inflation is likely to pick up amid the recovery in global oil prices. At the same time, continuing negative output gaps in Singapore's major trading partners should cap the extent of the increase in underlying global inflation, the Ministry of Trade and Industry and the Monetary Authority of Singapore said in a joint statement Tuesday.

On the domestic front, cost pressures are expected to stay low, as wage growth and commercial rents are likely to remain subdued, they said.

Core inflation is forecast to turn mildly positive this year, as the projected rise in oil prices from a year ago leads to a pickup in electricity and gas tariffs, and the disinflationary effects of government subsidies introduced in 2020 fade. Some components of domestic services inflation could also gradually increase, in tandem with the economic recovery, they said.

For 2021, core consumer prices are forecast to average between 0.0% and a 1.0% rise, while overall consumer prices are projected to range between a 0.5% decline and a 0.5% increase, MTI and MAS said.

Write to Ronnie Harui at ronnie.harui@wsj.com


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  02-23-21 0015ET
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