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Singapore’s inflation rises to 2.6% in November – Channel News Asia

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Singapore’s inflation rises to 2.6% in November – Channel News Asia

SINGAPORE: Singapore’s inflation continued to pick up pace in November due to higher accommodation cost and increases in all other major categories.

The consumer price index rose to 2.6 per cent on-year in November, compared with 2.0 per cent in October, according to the latest data from the Department of Statistics.

This was largely in line with economists’ expectations.

In a statement, the Ministry of Trade and Industry and the Monetary Authority of Singapore (MAS) said the increase had been anticipated earlier as service and conservancy charges rebates to HDB households had kept housing-related costs down in October.

As a result, accommodation cost rose by 3.3 per cent, higher than the 1.9 per cent increase in October.

Increases in accommodation cost accounted for around half of the 0.6 per cent pick-up in overall inflation in November.

Private road transport costs climbed 3.4 per cent, following an increase of 2.7 per cent in October, mainly as a result of higher COE premiums. Petrol pump prices were also higher compared to a year ago.

Services inflation increased to 2.8 per cent in November from the 2.5 per cent recorded in October, led by pricier holiday travel and household services.

Food inflation inched up to 2.6 per cent in November from 2.5 per cent a month ago, primarily due to price increases for non-cooked food items.

MAS Core Inflation, which excludes the costs of accommodation and private road transport, edged up to 2.1 per cent in November compared to 1.8 per cent a month ago. This was due to stronger contributions from services and food items.

MAS said overall imported inflation is expected to remain subdued because of spare production capacity in the advanced economies and ample supply buffers in the commodity markets.

However, the pass-through of domestic costs to prices of consumer services could intensify as a result of the rising cost pressures that firms are facing from business rentals and labour costs.

Taking these factors into account, MAS Core Inflation is expected to rise over the next few quarters and average 1.5-2 per cent in 2013 and 2-3 per cent in 2014.

Singapore’s overall headline inflation is projected to come in at 2.5 and 3 per cent in 2013, and 2 and 3 per cent in 2014.

Jeff Ng, an economist at Standard Chartered Bank, said: “Given that the economy is recovering, but we’ve not seen a lot of this pass-through of wages, as well as the increase in prices yet. And given that the labour market remains pretty tight, I think we do expect some inflationary pressures to push up inflation for 2014, higher than what we’ve experienced in 2013.”

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