Core inflation in Singapore rose to 2% in July, up from 1.6% in June. This information comes from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI). The increase was mainly due to higher electricity and gas prices, along with rising costs for services and food. The core inflation rate is still below the median estimate of 2.2% predicted by economists surveyed by Bloomberg.
Key Details
Headline inflation also went up, reaching 2.2% in July, compared to 1.9% in June. This increase was driven by higher accommodation costs and the rise in core inflation. However, this headline figure was below the median forecast of 2.4% from economists.
On a month-to-month basis, the core consumer price index (CPI) rose by 0.3%. In contrast, the all-items CPI fell by 0.2%. MAS and MTI kept their full-year inflation forecast for 2026 at a range of 1.5% to 2.5%. They noted that high global energy prices have led to increased electricity and gas tariffs, as well as higher transportation fares. The agencies pointed out that global oil prices remain high and volatile. Adverse weather conditions may also reduce agricultural yields, raising imported food prices.
Background
MAS and MTI stated, "As higher input costs pass through global supply chains, the prices of a wider range of Singapore's imported goods and services are expected to pick up in the quarters ahead." They also mentioned that the risks to inflation are tilted to the upside, reflecting ongoing uncertainties in global energy supply.
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The rise in inflation could affect monetary policy decisions, especially regarding interest rates. Higher energy costs may lead to increased input prices across various sectors, including utilities and food. Investors will be watching for the next inflation data release and any potential policy changes from the MAS.
Based on reporting by: businesstimes.com.sg