The Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) announced in a joint statement on Monday (24 Aug) that Singapore’s core inflation rose to 2% year-on-year in July.
This is an increase from 1.6% in June.
MTI and MAS added that the increase was the result of higher inflation in electricity and gas, services, and food.
The report noted that CPI-All Items inflation rose from 1.9% in June to 2.2% year-on-year in July.
Source: Monetary Authority of Singapore
This was due to an increase in accommodation inflation alongside higher core inflation.
Additionally, electricity and gas prices reversed their decline in June, recording a large increase in July, mainly reflecting a sharp rise in electricity prices.
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Rafael Minguet Delgado on Pexels, for illustration purposes
According to the report, the sharp rise in electricity prices was largely due to the increase in the regulated electricity tariff in July.
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Services inflation rose from 1.5% in June to 1.7% in July, as airfares and point-to-point transport service prices increased at a faster pace.
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Accommodation inflation increased by the same increment, from 0.6% to 0.8%, due to larger increases in housing rents and maintenance fees.
Additionally, food inflation edged up from 2.1% to 2.2% as prices of food services and non-cooked food increased at a faster pace.
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On the other hand, inflation for retail and other goods has eased, from 1.7% to 1.4%.
Private transport inflation also slowed from 8.4% to 8.0%.
In the report, MAS said elevated global energy prices have led to an increase in Singapore’s electricity and gas tariffs and higher transportation fares.
Global oil prices remain high and volatile, while adverse weather conditions are expected to lower agricultural yields and raise Singapore’s imported food prices.
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More of Singapore’s imported goods and services are also expected to increase in price as higher input costs pass through global supply chains.
At the same time, domestic unit labour costs in the services sector are expected to rise at a slower pace amid sustained productivity growth and moderating nominal wage growth.
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For the whole of 2026, both MAS Core Inflation and CPI-All Items inflation are projected to average between 1.5% and 2.5%.
Core inflation is expected to remain elevated into 2027 before “moderating more discernibly from around mid-2027”.
“At this juncture, the risks to the inflation outlook remain tilted to the upside. Renewed disruptions in global energy supplies or worse-than-expected weather conditions could raise Singapore’s imported costs by more than anticipated,” MAS and MTI said.
Also read: S’pore inflation holds steady at 1.8%, but food and accommodations see slight rises
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