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Business Times - 24 Oct 2009

Sept CPI falls but food, health care rise

FOOD and healthcare costs rose in September, despite an overall decline in general price levels, according to the Department of Statistics. On the whole, last month's consumer price index fell 0.4 per cent from a year earlier.

The prices of goods in most segments fell, with the largest decline seen in the housing index, which sank 2.5 per cent due to lower electricity, gas tariffs and cheaper liquefied petroleum gas.

Lower holiday travel costs depressed the cost of 'recreation and others' by 1.8 per cent, while the cost of transport and communications slid 0.2 per cent due mainly to cheaper petrol. However, the cost of education and stationery, as well as health care, went up about 2 per cent, while food rose 0.8 per cent.

For the first nine months of this year, the overall price index rose 0.4 per cent. Excluding accommodation cost, it fell 0.5 per cent over the same period.

In a note, Citigroup said that inflation momentum is likely to resume soon, with fuel prices already observed to move up some 10-20 per cent in October, breaching the US$80 mark.

The analysts also noted that car prices were driven up by LTA's announcement in late September that COE quotas for the remainder of the year will be reduced by an overall 15.7 per cent.