Singapore’s consumer prices fell for a 13th straight month in the longest streak of declines in almost three decades amid a renewed slump in oil prices.
Consumer prices fell 0.8% from a year earlier in November, data released in Singapore Wednesday showed. The median estimate in a Bloomberg News survey was for a 0.7% decline. Core inflation, which excludes private transport and accommodation costs, eased to 0.2% last month.
Core inflation is expected to pick up gradually over the course of 2016 as the year-on-year disinflationary effects of lower oil prices and one-off government measures to lessen costs ease, the central bank and trade ministry said in a joint statement. The Monetary Authority of Singapore eased its exchange rate policy for a second time this year in October, saying weakening prospects for global growth will pose “headwinds” in the coming months.
With the annual average price of Brent crude at the lowest in 11 years, a renewed slump in oil prices could delay a recovery in consumer prices just as weaker global demand threatens to hurt Singapore’s export-dependent economy next year.
“Instead of bottoming say in early 2016, we might actually see it bottoming middle of 2016,” Vishnu Varathan, Singapore-based economist at Mizuho Bank Ltd., said before the report, referring to inflation. “Oil is certainly worth watching because if the plunge in oil prices turns out to be a lot more brutal, with the severe consequences for the related energy sectors, then there might be some need to reconsider.”
