Singapore inflation moderated in 2H

2012 inflation fell below 5%.

According to a report by the Department of Statistics, during the second half of 2012, the consumer price index (CPI) for general households rose by 4.1 per cent over the same period in 2011. This was a moderation from the 5.1 per cent increase registered in the first half of 2012. 

There was likewise a decline in the CPI excluding imputed rentals on Owner-Occupied Accommodation (OOA), which fell from 4.0 per cent to 3.3 per cent. The lower income group experienced a smaller increase in CPI excluding imputed rentals on owner-occupied accommodation compared to the middle and higher income groups.

The increase for the lowest 20% was 2.8 per cent, lower than that for the middle 60% and highest 20% income groups at 3.2 per cent and 3.6 per cent respectively. The picture was different using the CPI-All Items, which showed increases for the lowest 20%,  middle 60% and highest 20% income groups of 4.8 per cent, 4.2 per cent and 3.8 per cent respectively.

However, the differences in these inflation rates between the groups were attributable to imputed rentals on owner-occupied accommodation which do not involve actual cash expenditures of households who own their homes. 

Other items responsible for the rise in CPI for all income groups were cars and food. The CPI increase was also partially due to an increase in costs of minor repairs & maintenance, largely on account of a lower base in the second half of 2011 due to government rebates on service & conservancy charges (S&CC) for HDB households.

For the whole year of 2012, the CPI-All Items for general households rose by 4.6 per cent, lower than the 5.2 per cent in 2011. Similarly, CPI excluding imputed rentals on owner-occupied accommodation rose by a smaller 3.6 per cent in 2012 compared to the 4.2 per cent in 2011. 

The corresponding CPI-All Items for the lowest 20%, middle 60% and highest 20% income groups increased by 5.6 per cent, 4.7 per cent and 4.2 per cent respectively. 

Similar to second half of 2012, the overall differences between the groups were attributable to higher imputed rentals on owner-occupied accommodation. Excluding imputed rentals on owner-occupied accommodation, the CPI for the lowest 20%, middle 60% and highest 20% income groups went up by 3.5 per cent, 3.6 per cent and 3.8 per cent respectively. 

Higher prices of cars and dearer food also contributed to the increases in the CPIs for all income groups. There was also a year-on-year increase in the costs of minor repairs & maintenance, arising mainly from a lower base in 2011 due to government rebates on service and conservancy charges (S&CC) for HDB households.