Singapore enters 19th month of deflation with 1.6% CPI slide in May

Blame it on housing rebates disbursed last year.

Singapore’s consumer price index fell by 1.6% in May, extending its longest slide in record.

According to the Monetary Authority of Singapore, the decline was mostly due to base effects associated with the timing of the disbursement of Service & Conservancy Charges (S&CC) rebates last year. The rebates resulted in sharply lower housing maintenance and repair costs.

MAS core inflation, however, inched up to 1.0% in May, from 0.8% in April, reflecting a pickup in services inflation.

Private road transport cost was 7.6% lower, compared to the 7.1% decline a month earlier. This was driven by a larger decline in petrol pump prices, reflecting the relatively high base in May last year.

Food inflation edged down to 2.2% from 2.3% in the previous month, as increases in the price of prepared meals such as restaurant food moderated.

Meanwhile, services inflation rose to 1.5% from 0.7% a month earlier, as the disinflationary effect from the reduction in foreign domestic worker concessionary levy since May 2015 dissipated.