SINGAPORE, Jan 23 — Consumer Price Index (CPI)-All Items inflation fell to 1.5 per cent in December from 2.6 per cent in the preceding month, mainly reflecting the decline in private road transport cost.

In a joint statement, the Ministry of Trade and Industry and Monetary Authority of Singapore said private road transport cost decreased by 2.8 per cent in December, following the 3.4 per cent rise in November, on account of lower certificate of entitlement (COE) premiums.

The recent weakness in car COE premiums partly reflected a high base as premiums surged in the same period one year earlier.

Accommodation cost rose by 2.9 per cent compared to the 3.3 per cent increase in the previous month, as housing rentals edged up at a slower pace on a year ago basis.

Imputed rentals on owner-occupied accommodation (OOA) contributed 0.5 percentage point to overall inflation, down slightly from 0.6 percentage point in November.

Food inflation inched up to 2.7 per cent from 2.6 per cent in November due to a slightly faster pickup in non-cooked food prices.

Services inflation was stable at 2.8 per cent as smaller increases in the cost of holiday travel and household services were offset by higher contributions from telecommunications and medical treatment costs.

For the whole of 2013, CPI-All Items inflation averaged 2.4 per cent, sharply lower than the 4.6 per cent in 2012.

MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased to 2.0 per cent in December from 2.1 per cent a month ago due to cheaper retail items such as clothing & food.

For the whole of 2013, MAS Core Inflation came in at 1.7 per cent compared to 2.5 per cent in 2012.

Overall imported inflation is expected to remain subdued because of spare production capacity in the advanced economies and ample supply buffers in the commodity markets.

However, the pass-through of domestic costs to prices of consumer services could intensify as firms face rising cost pressures from higher rentals and wages.

Taking these factors into account, MAS Core Inflation is expected to rise over the next few quarters and average 2-3 per cent in 2014. — Bernama