Chen Shiyin Dec. 23 (Bloomberg) -- Singapore’s inflation eased in November for a second month as lower oil prices cut transportation costs in the city state. The consumer price index increased 5.5 percent from a year earlier, after gaining 6.4 percent in October, the Department of Statistics said today. That matched the median forecast of nine economists in a Bloomberg News survey. Prices declined 0.2 percent from October, without adjusting for seasonal factors. Easing inflation has allowed policy makers around the world to lower interest rates and boost public spending to stimulate their economies amid a deepening global recession. Singapore, whose economy may shrink next year for the first time since 2001, will unveil a spending plan in its 2009 budget next month, according to Finance Minister Tharman Shanmugaratnam. “The extent of the move in global oil prices has a huge bearing not just on fuel and energy but has filtered down to manufactured goods as well,” said Vishnu Varathan, an economist at Forecast Singapore Pte. “Easing inflation gives you a lot more elbow space for an expansionary fiscal policy or further easing in the monetary policy arena.” The island’s economy has contracted for two straight quarters and companies such as DBS Group Holdings Ltd. and Stats Chippac Ltd. have cut jobs and wages. The central bank in October ended a policy favoring gains in its currency in an effort to support the economy. Transport and communication costs fell 1.9 percent in November from a year earlier, following a retreat in gasoline prices and as taxi fares and car prices declined, today’s report showed. Crude oil has fallen 73 percent since reaching a record high of $147.27 a barrel on July 11. To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net.

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