CPI creeps up 1.1% in July on housing costs

Source : Business Times – 25 Aug 2009

SINGAPORE’S consumer price index (CPI) rose 1.1 per cent in July from June but fell 0.5 per cent year on year, the Department of Statistics (DOS) said yesterday.

The year-on-year decline was led by lower costs of transport and communications, housing and recreation and other items.

Transport and communication costs dipped 3 per cent on lower petrol prices. Housing costs eased 1.3 per cent on lower electricity tariffs. Recreation and other items fell 0.9 per cent thanks to lower holiday travel costs.

On a seasonally adjusted basis, the CPI rose 0.3 per cent from June, after June’s 0.2 per cent rise from May. For the January-July period, the CPI was 0.6 per cent higher than it was a year back.

The month-on-month increase in July was largely due to higher housing and transport and communications costs. Housing costs were up 3.4 per cent in July, while transport and communication costs rose 1.1 per cent.

DOS said the CPI for general households rose 0.8 per cent in the first half of this year compared with the same period in 2008. This compared with a 7.1 per cent year-on-year rise in H1 2008 and a 6 per cent increase in H2 2008.

The increase in CPI for all income groups in H1 2009 was due to higher food and accommodation costs, though these price increases were partly offset by lower petrol and car prices and cheaper electricity tariffs.

For H1 2009, the inflation rate for households in the lowest 20 per cent income bracket was 1.6 per cent, compared with 0.7 per cent for households in the middle 60 per cent and 0.9 per cent for those in the top 20 per cent.

This is because the lowest 20 per cent income group has higher weights of food and accommodation in its CPI basket. Lower prices of petrol and cars – which have higher weights in the CPI baskets for the middle 60 per cent and top 20 per cent income groups – accounted for more moderate inflation rates for these groups.