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Published: Monday July 23, 2012 MYT 3:16:00 PM

Singapore's CPI up 5.3% in June

SINGAPORE: Singapore's consumer price index (CPI)-All Items inflation rose to 5.3 per cent in June from 5.0 per cent in May 2012.

The increase primarily reflected higher accommodation cost, which contributed 2.2 percentage points to the CPI-All items inflation, compared to 1.8 per cent in May, according to a joint-statement by the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry.

Price increases of other major CPI categories slowed. Services inflation edged down from 2.9 per cent in May to 2.8 per cent in June, while food inflation moderated from 2.5 per cent to 2.3 per cent over the same period.

Excluding the costs of accommodation and private road transport, the MAS Core Inflation was stable at 2.7 per cent for the third consecutive month, as the lower contribution from prices of food, services and oil-related items was offset by stronger y-o-y increases in prices of retail products such as clothing and footwear.

On outlook, the statement said the CPI-All Items inflation and MAS Core Inflation will be lower on average in the second half of 2012.

The pass-through of wages and other business costs to consumer prices will continue, but at a more moderate pace, than that seen earlier this year.

At the same time, the earlier weakness in global commodity prices will dampen pressure on domestic prices of oil and food items in the near term.

The MAS Core Inflation will ease further in the second half of 2012 and average between 2.5-3.0 per cent for the whole year.

Accommodation cost inflation, while moderating, has been stronger than expected, as leasing contracts continue to be renewed at rentals that are considerably higher, especially in the Housing Development Board (HDB) segment.

Certificate of Entitlement (COE) premiums have risen sharply recently and will remain at elevated levels, given the further reduction in its supply from August this year.

CPI-All Items inflation is still expected to be lower on average in the second half 2012 compared to the first, but will remain above its historical average.

For the whole year, CPI-All Items inflation is likely to come in at the upper half of the 3.5-4.5 per cent forecast range. - Bernama

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