Headline Inflation Rate Unchanged at 2.4% Due to Rise in Transport Costs

SINGAPORE: Singapore’s headline inflation rate remained steady at 2.4% year-on-year (YoY) in July, according to the latest data released by the Department of Statistics (SingStat). The overall inflation rate held firm due to a combination of rising private transport costs and a deceleration in accommodation and core inflation.

On a month-on-month (MoM) basis, the Consumer Price Index for All Items (CPI-All Items) recorded a slight decline of 0.1%, indicating a marginal dip in general price levels across the economy. The Monetary Authority of Singapore’s (MAS) core inflation, which excludes accommodation and private transport costs, eased to 2.5% YoY in July, down from 2.9% in June. This moderation was primarily attributed to slower price increases in sectors such as food, services, and retail goods.

Accommodation inflation showed signs of cooling, with the rate dipping to 3.1% YoY, as SingStat reported a more modest rise in housing rents compared to previous months. Food inflation also eased slightly to 2.7% YoY, down from 2.8% in June, while services inflation decelerated from 3.4% YoY in June to 2.9% YoY in July. Retail and other goods experienced slower price movements as inflation fell to 0.3% YoY from 0.5% in June.

Conversely, private transport inflation experienced a notable turnaround, rising to 0.9% YoY in July from a negative 0.7% in June. This increase was primarily driven by smaller declines in the prices of cars and motorcycles, along with a steeper rise in petrol prices.

Looking ahead, the Ministry of Trade and Industry (MTI) and MAS anticipate that core inflation will continue its gradual downward trend in the coming months, with further declines expected in the fourth quarter of 2024. For the full year, the agencies project headline inflation to average between 2.0% and 3.0%, while core inflation is forecasted to range between 2.5% and 3.5%.

MTI and MAS also noted that when excluding the transitory effects of the one-percentage-point Goods and Services Tax (GST) hike, which raised the rate to 9%, both headline and core inflation are expected to settle within a more moderate range of 1.5% to 2.5%.