Singapore’s core consumer prices eased to 1.7 per cent in November on a year-on-year basis from 1.9 per cent in October due to smaller increases in the costs of services, retail items and electricity and gas.

This is lower with the 1.9 per cent rise projected by a median forecast in a Reuters poll.

The overall cost of retail items rose by 1.1 per cent in November, moderating from the 1.3 per cent increase in October, reflecting lower inflation for telecommunication equipment, clothing and footwear items, household durables and medical products, the Monetary Authority of Singapore and Ministry of Trade and Industry said in a joint statement on Monday (24 December).

The cost of electricity and gas increased at a slower pace of 15.4 per cent year-on-year in November, compared to the 16.6 per cent rise in the preceding month. The reflected the effect of the phased nationwide launch of the Open Electricity Market on electricity prices.

Food inflation came in at 1.4 per cent year-on-year in November, unchanged from the previous month.

The core inflation measure excludes changes in the price of cars and accommodation, which tend to be influenced by government policies and are volatile.

The all-items or headline inflation moderated to 0.3 per cent year-on-year in November, from 0.7 per cent in October, largely due to a sharper fall in private road transport costs.

Outlook

External sources of inflation have increased in recent quarters. Global oil prices have come in higher on a year-on-year basis, and inflation for non-oil imports has also picked up. On the domestic front, the improving labour market should underpin a faster pace of wage growth in 2018 and 2019, compared to 2017. Growth in the unit labour cost for services has picked up recently.

As domestic demand strengthens further, there could be a greater pass-through of higher import and labour costs toconsumer prices, the report said. However, the extent of overall price increases will be capped by greater market competition in several consumer segments, such as telecommunications, electricity and retail.

Core inflation is expected to rise modestly in the months ahead, and come in within the forecast range of 1.5 to 2 per cent in 2018, and 1.5 to 2.5 per cent in 2019, the statement said. Similarly, headline inflation is projected to be about 0.5 per cenhttps://sg.finance.yahoo.com/news/singapore-hdb-offer-around-15000-bto-flats-2019-080338378.htmlt in 2018, before picking up to 1 to 2 per cent in 2019.

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