July inflation rises 1.1%

Get Ready for inflation soon. Oil prices are rising again. But it will remain stable for quite a while. China's factories are still not picking up, so economy is recovering, but won't be that fast.


SINGAPORE'S inflation rose 1.1 per cent in July from June due mainly to higher housing, transport and communication costs.

But compared to a year ago, the consumer price index (CPI) was lower by 0.5 per cent, said the Department of Statistics in a statement on Monday.

And for the first seven months of this year, the CPI was 0.6 per cent higher compared with the same period last year.

Housing cost went up by 3.4 per cent from June as a s a result of higher electricity tariffs and service and conservancy charges as rebates were given in June but not in July.

The 1.1 per cent increase in the costs of transport and communication was attributed largely to higher prices of cars and internet subscription fees.

Excluding accommodation costs, the consumer price index moved up by 0.6 per cent. On a seasonally adjusted basis, the CPI in July was 0.3 per cent higher compared with June.

From a year earlier, food prices, which make up 23 percent of the index, rose 1.3 per cent in July. But transport and communications costs fell 3 per cent, declining for a 10th month amid cheaper gas and automobile prices. Housing slid 1.3 per cent in July, after a 0.7 per cent decline in June.

In a separate statement earlier on Monday, the Department of Statistics said the CPI for general households for the first half year rose by 0.8 per cent compared with a year ago.

The increase was much lower than the 7.1 per cent and 6.0 per cent recorded in the first half and second half of 2008.

Households in the lowest 20 per cent income group faced higher inflation at 1.6 per cent. The middle 60 per cent and top 20 per cent income groups experienced consumer price increases of 0.7 per cent and 0.9 per cent respectively from January to June.

Food prices and accommodation costs were the two main items responsible for the increases in the CPI for all income groups during the first six months.

However, these price increases were moderated by lower petrol and car prices as well as electricity tariffs.

The higher inflation rate experienced by the lowest income group reflected the relatively higher weights of food and accommodation in its CPI basket compared to the other two income groups, said the department.

In contrast, lower prices of petrol and cars - which have higher weights in the CPI baskets of the middle and top income groups - contributed towards the moderation of inflation rates for these groups.