The consumer price index rose 2.9 percent from a year earlier following a 4.3 percent rise in December, the city-state's statistics department said Monday. Inflation has slowed from a 26-year high in June of 7.5 percent.

Transport and communication costs, which make up 22 percent of the index, fell 5.0 percent in January from a year earlier. Prices of food, which account for 23 percent of the index, rose 6.2 percent while housing prices gained 7.7 percent.

Oil futures have fallen about 73 percent since July.

Compared with the previous month, the consumer price index fell 0.1 percent in January after dropping 0.6 percent in December.

The government last month lowered its inflation forecast for this year. It now expects a range between no change in prices and a 1 percent drop from an earlier estimate of prices rising between 1 percent and 2 percent.

The government expects the economy to shrink as much as 5 percent this year as demand for the country's exports plummets amid a global slowdown.

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