Singapore Consumer Prices Fall For Fifth Consecutive Month

Singapore’s consumer prices dropped for a fifth consecutive month, reflecting lower costs of housing, recreation as well as transport and communication, an official report showed Wednesday.

The Department of Statistics said consumer prices dropped 0.3% year-on-year in August, slower than a 0.5% fall seen in the preceding two months. The rate came in less than economists’ forecast for a 0.4% decline.

Housing costs fell 1.6% on an annual basis, due to lower electricity and gas tariffs and cheaper liquefied petroleum gas. Transport and communication costs slipped 0.4%, mainly due to cheaper petrol prices. Recreation costs were down 1.4%.

Meanwhile, health care prices climbed 2%, while food as well as clothing & footwear prices were up 0.9% and 1.7%, respectively.

Month-on-month, consumer prices rose 0.4%, but the pace was slower than the 1.1% in July. The increase was mainly due to higher costs of transport and communication, clothing and footwear, as also housing and stationery items.

On a seasonally adjusted basis, consumer prices climbed 0.4% in August, faster than the 0.3% in the preceding month. Excluding accommodation costs, consumer prices were down 0.9% year-on-year in August, but rose 0.5% compared to the previous month.

For the first eight months of the year, consumer prices were higher by 0.5% from the same period last year.

The Monetary Authority of Singapore in a report on September 2 said consumer prices could be flat this year compared to its earlier forecast for a 1.5% drop. The authority expects a slower pace of contraction for the economy.

The MAS expects the economy to decline 3.6% this year, slower than a 6.5% fall predicted in its June survey and compares with the 4% to 6% decline expected by the government for the year. For the next year, the agency forecasts the growth to be 4.5%, higher than the 4.2% rise expected in the June survey.

Meanwhile, the Asian Development Bank in a report Tuesday said developing Asian economies were poised to lead the global economic recovery, proving to be more resilient than initially thought. Moreover, the bank also raised its growth forecast for the year for the region. The lender expects a V-shaped rebound for the regional economy.

The latest update of Asian Development Outlook 2009 projects developing Asian economies, which excludes Japan, to grow 3.9% this year, faster than a 3.4% growth estimated earlier. Further, it revised upward the growth forecast for the next year, expecting a growth of 6.4% compared to a 6% rise estimated earlier. The Manila-based bank expects Singapore to shrink 5% this year and grow 3.5% next year.