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Singapore experiences deflation for fourth straight month

SINGAPORE: The Republic experienced deflation for the fourth consecutive month in February as the consumer price index (CPI) stayed in negative territory, according to figures released by the Department of Statistics on Monday (Mar 23).

The CPI came in at -0.3 per cent last month, edging up slightly from -0.4 per cent in January, mainly due to higher food and services inflation caused by the Chinese New Year festive period, according to a joint news release from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI).

Food prices rose by 2.5 per cent, compared to the 2.2 per cent increase in January, as a result of the seasonal pickup in demand during the Chinese New Year period.

Services inflation increased to 1.5 per cent, from 1.2 per cent a month ago, largely led by the higher cost of holiday travel during the festive season, and the rise in tuition and other fees.

Accommodation cost declined by 2.1 per cent, extending the 1.9 per cent fall in the previous month, reflecting the soft housing rental market.

Private road transport cost was 5.8 per cent lower, following the 5 per cent drop in January, due to the sharper correction in Certificate of Entitlement (COE) premiums. Meanwhile, petrol pump prices declined compared to a year ago, in tandem with the fall in global oil prices. However, the pace of decline slowed following the increase in petrol duty rates.

Core inflation which excludes changes in the price of private road transport and accommodation came in at 1.3 per cent compared to 1 per cent in the previous month, reflecting the stronger food and services inflation, the news release said.

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