May CPI Dips On Government Rebates; Consumer Outlook Improving

Economic Research	24 June 2016
Singapore
Economic Highlights
May CPI Dips On Government Rebates; Consumer Outlook Improving Singapore’s headline deflation worsened to 1.6% y-o-y in May, after improving to -0.5% the month before, due to a reversal in base effects associated with the disbursement of service & conservancy charges (S&CC) rebates. The rebates, which affect housing maintenance costs, were distributed in April, July and October in 2015, but shifted to May, July and October this year. Over the two months, inflation dropped by an average of 1.0%, similar to its reading in March. Besides accommodation costs, prices of clothing & footwear and transportation costs deteriorated from the month before, whereas prices of household durables & services, as well as holiday expenses continued to thread higher, indicating improving consumer sentiment. MAS core CPI, which excludes the costs of accommodation and private road transport, rose 1.0% y-o-y, edging higher from its 0.8% climb in April. Economist:  Ng Kee Chou | +603 92802179
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