SINGAPORE’S CPI INFLATION DROPS BELOW 5%

SINGAPORE - Headline inflation fell to 4.0% on-year in July, below 5% for the first time since February this year and below expectations of 4.5%. This was partly due to favourable base effects, which are likely to keep inflation closer to 4% for the rest of the year, says ANZ Bank. However, inflation rose 0.2% month-on-month, up from zero. Favourable base effects also fed through to housing and transport. Year-on-year inflation rates in both these components dropped 3.3% to 6.4% and 5.4%, respectively. However, accommodation costs (the main driver of housing) still increased 0.5% m/m.