Singapore's CPI inflation slightly higher at 1.8% in June

Singapore's headline inflation registered slightly higher to 1.8 percent in June from a year-on- year rise of 1.6 percent in May, mainly due to petrol pump prices which increased with the recent pick-up in global oil prices, the city-state's central bank and Ministry of Trade and Industry jointly said on Tuesday. Singapore's headline inflation registered a three-year low of 1. 5 percent in April. The Monetary Authority of Singapore (MAS), the central bank, said the rising petrol pump prices were the main drive of the CPI inflation in June, which increased after three consecutive months of price correction. However, the electricity tariffs remained 7.2 percent lower on year. Overall, the price of oil-related items fell by 1.0 percent in June, compared to a larger decline of 4.4 percent in May, the MAS said. The rise of some services costs is another main drive of June's inflation. Service inflation was at 2.7 percent in June, higher than the 2.5 percent in May. The central bank said it was mainly due to "costlier medical insurance and holiday travel". Private road transport cost, one of the usual main drive of the inflation, fell by a more moderate 2.1 percent in June, compared with the 3.7 percent decline in May. The MAS said " this reflected the smaller drop in Certificate of Entitlement (COE) premiums in May on a y-o-y basis, as the market continued to adjust to the various motor vehicle-related policy measures introduced since February." Singapore government recently announced a set of measures related to the car ownership, following surging COE premiums over the past several years. The accommodation cost inflation was 4.8 percent in June, down from 5.1 percent in May, while the food inflation was stable at 2. 0 percent. The core inflation monitored by the MAS, which excludes the costs of accommodation and private road transport, stood stable at 1.7 percent in June, "as the pickup in services inflation was offset by lower contributions from prices of retail related items such as clothing and footwear." The central bank said that it expects imported inflation to most likely remain subdued this year, given ample supply buffers in the commodity markets and excess capacity in the global economy. However, domestic cost pressures are expected to persist amid a tight labour market, and cost pass-through to prices of consumer services could also pick up slightly. The core inflation is expected to rise moderately in the second half and average 1.5 percent to 2.5 percent this year. Considering "the sharper-than-expected decline in car prices", the central bank revised the full-year headline inflation to average 2-3 percent from 3-4 percent previously.