CPI falls 0.7% in April

This is a related news to the 'Mum's cooking, and everyone's eating home' news, which is causing lower sales at eateries but more at groceries – a higher bill at home…

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Singapore is beginning to experience deflationary pressures, as consumer prices fell last month due to lower housing and transportation costs.

Data released yesterday by the Department of Statistics showed that the consumer price index (CPI) last month fell 0.7 per cent from April 2008, the first decline since June 2005. Analysts had expected it to rise 0.4 per cent.

April's CPI reversed the 1.6-per-cent increase in March. The fall was due mainly to a decline in housing, transport and communication, as well as recreation costs. Lower electricity and conservancy charges helped push the housing component of the CPI down. Transport and communication costs slid more than 6 per cent as a result of cheaper petrol and lower car prices.

The April CPI was 1.5 per cent down from the previous month after adjusting for seasonal factors, the biggest decline since records began in 1974, Reuters reported. The central bank is forecasting that this year's overall inflation rate will be between -1 and 0 per cent.

But Mr David Cohen, a director at Action Economics, doesn't think the latest data heralds the start of a deflationary spiral: "I think this is going to be temporary — several months below zero; it does reflect the easing of inflation pressure for sure. The energy prices globally have already started to steady. And maybe we will see softness on the housing side for a while yet." Channel NewsAsia

From TODAYOnline.com, Top News – Tuesday, 26-May-2009; see the source article here.

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