This stemmed mainly from a stronger increase in petrol costs and services prices.
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The central bank’s board meets February 2, and will publish new economic forecasts shortly after.
Consumer prices in the Republic fell year-on-year for 14 straight months in December and dropped 0.5 per cent for the entire 2015.
“Interestingly the Aussie dollar fell by around 11 per cent in 2015 but so-called tradable goods” prices only lifted 1.9 per cent over the year, ‘ he said.
Core inflation for the full year – excluding the costs of accommodation and private road transport – slipped to 0.5% from 1.9% the previous year.
However, they had limited impact on households’ daily expenses.
Underlying inflation, which strips out volatile price movements, was 2.0 per cent over the year, after a quarterly rise of 0.55 per cent.
The Reserve Bank aims to keep inflation within a 2-3 per cent range when it is setting interest rates, and its preferred “core” measures of consumer prices rose an average of 2 per cent over the past year.
The Monetary Authority of Singapore’s core inflation gauge is expected to pick up gradually over 2016 as the disinflationary effects of budgetary and other oneoff measures ease, according to the statement. Meanwhile, CPI-All Items inflation will continue to be dampened by lower auto prices and imputed rentals on housing, due to an expected increase in the supply of Certificates of Entitlement and newly completed homes, they said.
Accommodation costs were 3 per cent lower last month, marking the 17th consecutive month of contraction and reflecting the soft housing rental market.
MAS and MTI said that looking to next year, external sources of inflation are “likely to remain muted”, due to ample supply buffers in major commodity markets and weak global demand conditions.
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Australian inflation has increased faster than expected in the December quarter, despite the plunge in petrol prices continuing to soften consumer price increases.
