A view of PSA's Tanjong Pagar container port and the skyline of the central business district in Singapore April 18, 2016. REUTERS/Edgar Su/File Photo
A view of PSA's Tanjong Pagar container port and the skyline of the central business district in Singapore April 18, 2016. REUTERS/Edgar Su/File Photo

Singapore CPI seen declining 0.5% year-on-year in July

August 20, 2016 1:31 AM (UTC+8)

 

SINGAPORE (Reuters) – Singapore’s consumer price index (CPI) is expected to show an annual decline for a 21st straight month in July, a Reuters poll showed, but some analysts say prices may have bottomed out and the index could return to positive territory by the year-end.

The median from a Reuters survey of 12 economists was for the CPI to have fallen 0.5% in July from a year ago.

A view of PSA's Tanjong Pagar container port and the skyline of the central business district in Singapore April 18, 2016. REUTERS/Edgar Su/File Photo
A view of PSA’s Tanjong Pagar container port and the skyline of the central business district in Singapore April 18, 2016. REUTERS/Edgar Su/File Photo

In June, the CPI fell 0.7%, extending a record run of consecutive year-on-year declines in headline CPI to 20 months – the longest streak since Singapore’s independence in 1965.

The CPI slid 1.6% in May for its biggest year-on-year drop in nearly 30 years.

“I think CPI…has bottomed out, and I do expect the headline number to return back to positive level towards the end of the year. If not, early next year,” said Irvin Seah, senior economist for DBS Bank.

But this will be mainly due to a comparison against a low base recorded a year ago, Seah said. “There’s really a lack of impetus that will drive inflation higher.”

Headline CPI has been falling on an annual basis since November 2014, hit by lower global oil prices as well as falls in housing rents and private transport costs.

According to the Reuters survey, core CPI was forecast to have risen 1% in July from a year earlier. Core CPI rose 1.1% in June, the fastest pace since February 2015.

Core CPI excludes changes in the prices of cars and accommodation, which are influenced more by government policies.

(Reporting by Masayuki Kitano; Editing by Simon Cameron-Moore)

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