Ending of Negative inflation in Singapore

Ending of Negative inflation in Singapore
Ending of Negative inflation in Singapore

Ending of Negative inflation in Singapore

 

It appeared like the streak of negative inflation was ending in Singapore. It took 2 years for the end to be in sight. In October 2016, the Consumer Prices Index (CPI) which is a measurement of the changes in the prices of goods and services purchased by consumers had shown 0.3 % drop. The CPI went flat in November and the negative inflation eventually ended last month in December 2016, paving way for a promising 2017.

The anticipation for a small inflation in the end of year 2016 would be a positive thing as this indicates that there is a demand.

 

Improvement

The cost of oil and cars were partly the reason for this negative inflation. The oil cost, for instance, were at $30 a barrel beginning of last year, however soon stood strong at $50 a barrel currently.

 

The falling cost of accommodation contributed to the problem with the latter being attributed to a weak Singapore property market. Whilst these have been on a downward spiral, food, healthcare and education have remained on a steady rise now. Food prices climbed up to 2% from 1.9%. The uncooked food items such as fruits and vegetables have been attributed for the increment.

 

The manufacturing sector posted an impressive 11.9% in the month of November 2016 which was higher than the previous one in the same month. The pace has been the fastest since the first quarter of 2014. This paints a positive economic growth for an entire year which would be better than anticipated.

 

The services inflation, on the other hand, rose to 1.5 %, The yearly decrement in the transitional subsidies for MediShield Life Premiums could have indirectly create an impact on medical and dental services, leading to a rise in the cost.

 

 

The Core inflation

The core inflation which does not include the cost of accommodation and private road transport is a measurement of the changes in the prices of a basket of goods and services which Singapore consumers are paying. The core inflation in Singapore has leaped to 1.3% in November 2016 as compared to November 2015.

 

 

 

Refer to the links below for more information,

http://www.straitstimes.com/business/economy/longest-streak-of-negative-inflation-in-singapore-ends-after-two-years
http://www.straitstimes.com/business/long-spell-of-negative-inflation-close-to-an-end
http://www.tradingeconomics.com/singapore/core-inflation-rate

 

 

 

 

 

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