Consumer prices rose by a moderate 1.59 percent last month, as vegetable prices continued to fall amid peak harvests, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
That compares with a year-on-year increase of 2.34 percent in October and marked the third straight month that headline inflation grew at a slower pace.
On a monthly basis, the consumer price index (CPI) dropped 0.76 percent last month, the DGBAS said in its monthly report.
“The decline in vegetable and fruit prices, as well as gas prices, was the major factor” behind the CPI’s slower growth, DGBAS section chief Wang Shu-chuan (王淑娟) told a press conference.
With the prices of vegetables and fruit sliding 16.63 percent and 2.94 percent respectively last month, overall food prices dropped 1.73 percent month-on-month, the report showed.
However, the cost of dining out rose by 2.66 percent last month from a year earlier, marking its fastest growth since March 2009, data showed.
The 1.59 percent year-on-year growth in the CPI last month was lower than the 2 percent rise forecast by DBS Bank (星展銀行).
Core CPI — which excludes vegetables, fruit and energy prices — climbed 0.96 percent last month, also lower than the 1 percent growth forecast by the bank.
For next year, DBS expects headline inflation to slow to 1.3 percent, from an estimated near 2 percent growth this year.
Meanwhile, wholesale prices dipped 3.87 percent last month from the previous year, DGBAS data showed.
With inflation gradually normalizing and the economy heading toward a modest recovery, the central bank is likely to stick to its current monetary policy, DBS said in a research note.
The bank is therefore likely to leave its key interest rate unchanged at 1.875 percent when the board meets later this meet, as well as over the next three quarters, the note said.
Wang shared DBS’ view, saying inflation this year would likely be below 2 percent — a critical mark set by the government — if the weather holds. The DGBAS forecasts CPI growth of 1.62 percent for the full year.
Inflation grew 1.96 percent year-on-year in the first 11 months of the year, DGBAS data showed.
Wang added that the DGBAS would adjust the base period for CPI calculation starting next year, changing it from 2006 to 2011.