Singapore: Inflation spikes in June
July 25, 2011
In June, consumer prices dropped 0.2% over the previous month, which contrasted the 0.6% increase recorded in May but matched market expectations. The monthly price drop mainly reflected lower prices for clothing and footwear (-3.0% month-on-month) as well as for housing (-0.9% mom). Housing costs dropped, as rebates for service & conservancy charges (S&CC) that were not provided in the previous month were given out in June. Despite the monthly price drop, annual inflation jumped from 4.5% in May to 5.2% June, as the 0.2% price decrease came in well above the 1.0% drop tallied in June last year. The June print represented the highest inflation level since January. Annual average inflation, which is the reference for monetary policy decisions, continued to rise, stepping up from 4.1% in May to 4.3% in June. The Monetary Authority of Singapore recently raised its average inflation forecast for this year to between 4.0% and 5.0%, up from the previous estimate of 3.0% - 4.0%.