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.
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.
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