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Singapore CPI drops as oil price collapses
Source: Agencies |
May 26, 2009, Tuesday
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Print Edition
Print Edition
SINGAPORE'S consumer prices fell in April for the first time in three years as a collapse in crude oil reduced transport costs.
The consumer price index, a broad measure of inflation, fell 0.7 percent in the 12 months through April, down from a 1.6 percent rise in the 12 months to March, the statistics department said yesterday. Compared to March, April's CPI fell 1.1 percent, the largest drop since 1977.
Singapore looks to be entering a period of deflation as the government expects prices to fall as much as 1 percent this year.
"We expect headline inflation to remain in the red for the next couple of months," said Prakriti Sofat, an economist with HSBC in Singapore.
"However, as the economy turns in the second half of the year on the back of the massive fiscal stimulus and regional trade recovery, we think inflation will flip back into the positive," he said.
Transport and communication prices in April tumbled 6.3 percent from a year earlier, housing fell 1.7 percent and recreation slid 0.3 percent. Inflation has slowed from a 26 year high in June of 7.5 percent.
Crude oil prices fell to below US$35 a barrel in March from a record US$147 last July before rising above US$60 recently.
Singapore's weak economy this year has depressed consumer demand and eased inflation pressure.
The gross domestic product plunged at an annual pace of 14.6 percent in the first quarter.
The government expects the economy to shrink as much as 9 percent this year.
The consumer price index, a broad measure of inflation, fell 0.7 percent in the 12 months through April, down from a 1.6 percent rise in the 12 months to March, the statistics department said yesterday. Compared to March, April's CPI fell 1.1 percent, the largest drop since 1977.
Singapore looks to be entering a period of deflation as the government expects prices to fall as much as 1 percent this year.
"We expect headline inflation to remain in the red for the next couple of months," said Prakriti Sofat, an economist with HSBC in Singapore.
"However, as the economy turns in the second half of the year on the back of the massive fiscal stimulus and regional trade recovery, we think inflation will flip back into the positive," he said.
Transport and communication prices in April tumbled 6.3 percent from a year earlier, housing fell 1.7 percent and recreation slid 0.3 percent. Inflation has slowed from a 26 year high in June of 7.5 percent.
Crude oil prices fell to below US$35 a barrel in March from a record US$147 last July before rising above US$60 recently.
Singapore's weak economy this year has depressed consumer demand and eased inflation pressure.
The gross domestic product plunged at an annual pace of 14.6 percent in the first quarter.
The government expects the economy to shrink as much as 9 percent this year.
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