Singapore Releases August 2010 Consumer Price Index
The consumer price index in July 2010 rose by 1.3 per cent over June 2010 due to higher costs of housing, transport as well as clothing & footwear.
Excluding accommodation costs, the consumer price index crept up by 0.8 per cent.
Compared with a year ago, the consumer price index increased by 3.1 per cent in July 2010 as a result of higher costs in transport, housing and food. Excluding accommodation costs, the consumer price index was 3.8 per cent higher.
In the first seven months of 2010, the consumer price index moved up by 2.1 per cent compared with the same period in 2009.
Excluding accommodation costs, the consumer price index increased by 2.9 per cent during the same period.
Month-on-Month Changes
The consumer price index in July 2010 rose by 1.3 per cent over June 2010 as a result of higher costs of housing, transport as well as clothing & footwear.
Housing cost increased by 2.6 per cent due to higher accommodation costs, electricity tariffs, and service & conservancy charges (S&CC) as rebates for S&CC were given in June 2010 but not in July 2010.
The cost of transport increased by 1.7 per cent, reflecting higher prices of cars and car insurance premium. Prices of clothing & footwear rose by 3.2 per cent owing to dearer ready-made garments and footwear after the Great Singapore Sale period.
Excluding accommodation costs, the consumer price index was 0.8 per cent higher in July 2010 compared with June 2010.
Seasonally-Adjusted CPI
On a seasonally adjusted basis, the consumer price index in July 2010 rose by
0.5 per cent. Excluding accommodation costs, the consumer price index registered an
increase of 0.4 per cent.
Year-on-Year Changes
Compared with July 2009, the consumer price index increased by 3.1 per cent in July 2010 due largely to higher costs of transport, housing and food. Cars and petrol were the main items contributing to the 10.7 per cent increase in the cost of transport.
Housing cost rose by 2.7 per cent on account of higher electricity tariffs and accommodation costs.
Food prices went up by 1.5 per cent, arising from dearer prepared meals, vegetables, fresh seafood, meat & poultry as well as rice and other cereals.
Excluding accommodation costs, the consumer price index was 3.8 per cent higher in July 2010 compared with a year ago.
The consumer price index in the first seven months of 2010 moved up by 2.1 per cent compared with the same period in 2009.
Excluding accommodation costs, the consumer price index crept up by 2.9 per cent over the same period.
Concept and Definition
The consumer price index (CPI) is commonly used as a measure of consumer price inflation. It measures price changes in a fixed basket of consumption goods and services commonly purchased by the households over time. The selection of goods and services in the CPI basket as well as their weights are kept constant at the base period to ensure that any changes in the CPI reflect only price changes.
The weighting pattern for the 2009-based CPI was derived from the expenditure values collected from the Household Expenditure Survey (HES) conducted from October 2007 to September 2008. These expenditure values were updated to 2009, taking into account price changes between 2007/08 and 2009.
The CPI is compiled on a monthly basis. For longer periods, the CPI is derived by averaging the monthly indices. For example, the yearly CPI is derived by taking a simple average of the 12 months’ indices for the year.
Scope and Coverage
The CPI covers only consumption expenditure incurred by resident households. It excludes non-consumption expenditures such as loan repayments, income and property taxes, purchase of houses, shares and other financial assets etc.
Resident households are defined as households headed by a Singapore citizen or permanent resident. The 2009-based CPI basket covered a total of 6,500 brands.
Measurement of Changes in the Consumer Price Index
To calculate month-on-month change, the difference between the CPI for the specific month and that for the preceding month expressed in percentage term is used. This measures the change in average prices between the two months and serves as a useful short-term indicator of price movement.
To measure the year-on-year change, the CPI for the specific month is compared with that for the same month of preceding year. Likewise, the annual inflation rate for a specific year is computed by comparing the average for the 12 monthly indices with that for the preceding year.
Consumer Price Index for “All Items Less Accommodation”
Accommodation comprises “rental and owner-occupied accommodation”, as well as “minor repairs & maintenance”. Within accommodation, a significant share was attributed to “owner-occupied accommodation” cost which was computed based on the imputed rental concept and hence, has no impact on the cash expenditure of households.
In addition, under minor repairs & maintenance, the rebates for service & conservancy charges (S&CC) which are given to households living in HDB flats in different periods of the year also result in some volatility in the monthly CPI. Hence, the series on ‘All Items less accommodation’ is compiled as an additional indicator for interested users.
Seasonally adjusted Consumer Price Index
The data series on CPI and its major components are seasonally adjusted using the X-12 procedure.
Seasonal adjustment is the process of estimating and removing seasonal effects from a time series. Users interested in the underlying price trends could refer to the seasonally adjusted data series.
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