Economy
Singapore’s core inflation drops to 2.5% in July, lowest since February 2022
According to MAS and MTI data released on 23 August, Singapore’s core inflation fell to 2.5% year-on-year in July, down from 2.9% in June, the lowest since February 2022. This decline is attributed to reduced inflation across all core CPI categories. The authorities expect core inflation to moderate through Q3 and decrease further in Q4.
SINGAPORE: According to data released by the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) on Friday (23 August), Singapore’s core inflation decreased to 2.5% year-on-year in July, down from 2.9% in June.
This marks the lowest level since February 2022, when it was 2.2%.
The drop in core inflation was attributed to lower inflation across all broad categories of the core consumer price index (CPI).
The core inflation rate also came in lower than the 2.9% forecasted in a Reuters poll.
On a month-on-month basis, core inflation, which excludes accommodation and private transport, fell by 0.1%.
Headline inflation, or CPI-All Items, remained unchanged at 2.4% year-on-year in July compared to June.
This stability was due to a slowdown in accommodation and core inflation being offset by a rise in private transport costs.
Month-on-month, headline inflation decreased by 0.3%.
In July, services inflation moderated to 2.9% year-on-year, down from 3.4% in June, largely due to a slower increase in holiday expenses.
Accommodation inflation eased slightly to 3.1% year-on-year, compared to 3.3% in June, as housing rents increased at a more modest pace.
Food inflation edged down to 2.7% year-on-year in July from 2.8% in June, driven by smaller increases in both non-cooked food and food services.
Retail and other goods inflation decreased to 0.3% year-on-year in July from 0.5% in June, reflecting a drop in the prices of clothing, non-durable household goods, and personal effects.
Electricity and gas inflation moderated to 6.6% year-on-year in July, down from 6.9% in June, due to a smaller rise in electricity prices.
Conversely, private transport costs increased by 0.9% year-on-year in July, reversing from a -0.7% year-on-year decline in June, as the decrease in car and motorcycle prices was smaller and petrol prices rose more steeply.
MAS & MTI: Core Inflation Expected to Gradually Moderate Through Q3 and Decline Further in Q4
The authorities observed that global energy and most food commodity prices have remained relatively stable in recent months.
According to MAS and MTI, “The costs of Singapore’s imported intermediate and final manufactured goods have also continued to be on a broad decline.”
They added that “inflation for services associated with overseas travel has moderated and should ease further over the course of the year as the air transport and hospitality sectors around the world restore supply.”
The authorities also noted that the “gradually strengthening” Singapore dollar’s trade-weighted exchange rate should help temper imported inflation in the coming months.
Within Singapore, the increase in unit labour costs has slowed in line with the cooling labour market.
However, businesses are likely to continue passing on previous increases in labour costs to consumer prices, though at a reduced rate, according to MAS and MTI.
Private transport inflation is expected to moderate from last year’s levels, thanks to a projected increase in the Certificate of Entitlement (COE) supply.
Similarly, accommodation inflation should continue to ease as more rental housing units become available.
For the year as a whole, core inflation is forecast to average between 2.5% and 3.5%, while CPI-All Items inflation is expected to average between 2% and 3%.
“Excluding the transitory effects of the 1%-point increase in the GST rate to 9%, both core and CPI-All Items inflation are expected to come in at 1.5– 2.5%,” said MAS and MTI.
Potential Risks to Inflation: Geopolitical, Environmental, and Supply Chain Factors
However, risks to the inflation outlook persist, said MAS and MTI.
Fresh geopolitical shocks, adverse weather events, and renewed global transportation disruptions could exert “upward pressure” on global energy and food commodity prices, as well as shipping costs.
Additionally, stronger-than-expected local labour market conditions could lead to a re-acceleration of wage growth.
On the other hand, an unexpected weakening of the global economy might lead to a greater easing of cost and price pressures, said the statement.
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S1
A simple analogy to demonstrate how these percentage numbers are meaningless.
In 2019 I weighted 100kg
In 2020 I lost 0.2kg
In 2021 I gained 2 kg
In 2022 I gained 6.1 kg
In 2023 I gained 4.8 kg
I weigh 112.7 kg. Am I heavier than before?
The prices are still higher than before and any % increase will keep the prices going even higher.
Drop? What drop? I know someone was caught with his pants down when a Bangala terrorist managed to sneak in and give talks.
That would mean this man, who now only can give excuse, for why this had happened becos he was caught with his PANTS DROPPED!
This same man must be thinking since he live in palatial ground of over 150,000sqft, nobody could have seen him ‘dropping his pants’!
Now that is what had dropped, someone’s pants!🤣🤣🤣🤣😆😆😆
All about making $$$$$$
What’s the use? Uncle/auntie hawkers say “Want you buy; or get lost!”
Such reports and stats is an attempt to ease concerns amongst the populace, … until reality hits at the cash till !!!
Is this what they call SOCIAL ENGINEERING?🤭🤭
S1
We must realise that everything is expensive to start with; the starting base is already very high. Even if the inflation numbers are correct, it simply means there is presently no excuses for food to skyrocket; excuses like GST increase. So, the inflation numbers don’t really matter. The plate of cai fan or nasi padang will still cost the same; if not more ( or perhaps up by “only” 2 7%?) MAS and MTI would have us think that things will be cheaper with this report. But it only tells us prices have gone up more slowly. And as I… Read more »
Com on lah, where got drop? At best you can say is inflation slowed down on paper.
Actual price on the ground still going up day by day, coe is one good example.
Same as ecoNOmy forecasts .
Inflation calibration depends on authorities whimps and fancies, preferences, and importantly there’s
INVARIABLY HEAVY POLITICAL Hand, and DICTATE.
What is basic food for eg to work out a routine afternoon meal. Bak Chor mee. Or avg price of a nasi lemak set, $4.50 or $3.00 respectively? How about chick rice, $5.00?
Do one buy chai sim, or kai lan as another basket component.
Do I buy gas RON 95 or RON 98?
Above example inflation calculation is futile, to MASSAGE Politicians egos.
Price gouging is happening in so many places in Singapore and the government is doing nothing. Break up monopoly, oligopoly and those who fix prices in the market now. Pass antitrust law now and create a competitive market.
Speaking from a purely neutral, technical and unbiased perspective , the statistics from the establishment is not independently audited by non-establishment people, or is it?
You get my point. Technically speaking, could there be human error ? Who verifies this there is no error? Can it be slightly inaccurate? Who proves this beyond reasonable doubt?
Conversely , we can phrase it as, could the actual performance be slightly better than reported? Likewise, could tiny inaccuracy make the data better than it really is in the absolute sense?
See, English is easy.
What is the relevance of all these index like core inflation? I knew the whole Singapore experience very high inflation as all my food prices rise very high, housing price skyrocket and everything prices increased like never before. It really tell a different story from what the index is telling us.
Have housing prices fallen? Does the additional grant that Desmond Lee was talking about have anything to do with this inflation print? Transport prices have not dropped. Rice prices have not dropped. Egg prices have not changed. Okay lah, maybe cooking oil may have come down a little.
Really wonder which segment of the population or consumer you have to be to actually experience a drop in price. Does special offers price drop count???
Based on real daily experiences, unless I m living in dreamy reality, this info is largely fake, a lie.
The prices of daily staples are the same coffee prices, bread, toast, chee chiong fun ice kacang all are static, unchanged for months to date.
Officials lies said too often become true – like what Trump said, don’t worry about telling, telling them often, people ll believe.