The Ministry of Trade and Industry (MTI) and Monetary Authority of Singapore (MAS) said in the joint release on Monday that the MAS core inflation, which excludes the costs of accommodation and private road transport, fell to -0.1 percent in February, from 0.3 percent in January.
The two authorities attributed the fall largely to a 0.4 percent decline in the cost of services, which was driven by a fall in airfares and holiday expenses.
Singapore's consumer price index for all items (CPI-All Items) grew 0.3 percent year on year in February, compared to 0.8 percent in the previous month. The authorities said that this was mainly due to the fall in core inflation as well as lower private transport inflation.
Singapore's private transport inflation came in lower at 2.4 percent in February, compared to 4.6 percent in January, due to a smaller increase in car and petrol prices.
According to the release, the COVID-19 outbreak has weighed heavily on Singapore's aviation and tourism industries, which could in turn lower the prices of travel-related items in the CPI basket. In addition, the implementation of safe distancing measures and fall in tourist arrivals have dampened consumer demand, and will cap any price increases for discretionary goods and services.
Meanwhile, the city-state's labour market conditions will continue to soften and dampen wage growth this year. The economic uncertainty from the outbreak is also likely to discourage firms from passing on any cost increases to consumers.
MTI and MAS said that Singapore would have inflationary pressures remain subdued in the near term, and they would closely monitor price trends and assess the impact of the COVID-19 outbreak on inflation.
MAS will release the MAS core Inflation and CPI-All Items inflation forecast ranges in its upcoming Monetary Policy Statement, they added.
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