Headline inflation eases to 4.1% in July due to private transportation costs

Meanwhile, core inflation went down 3.8% YoY in July 2023.

Singapore’s headline inflation eased to 4.1% year-on-year in July 2023 from 4.2% in June, said the Monetary Authority of Singapore (MAS). 

Core inflation declined 3.8% YoY in July 2023 from 4.2% in June. MAS said the decline was due to smaller increase in food prices and fall in electricity and gas prices.

Headline inflation eased due to reflected lower private transport inflation, in addition to the decline in core inflation.

On a monthly basis, core inflation increased 0.2% in July due to higher prices in food and services. Headline inflation, on a monthly basis, fell 0.2% in July due to lower transportation costs and lower accommodation prices.

Per sector

For every sector, private transport declined from 5.8% in June to 4.8% in July. Next, food inflation eased as the pace of increase in the prices of prepared meals and non-cooked food moderated. Costs went down 5.3% in July from 5.9% in the month before it.

Electricity & gas costs fell due to lower electricity and gas tariffs compared to 2022. For retail inflation, clothing and footwear prices led to the growth.

Accommodation inflation inched up due to the growth in Service & Conservancy Charges (S&CC) from a year ago.

Inflation to moderate

MAS experts said the core inflation is anticipated to moderate further over the next few months whilst imported costs will stay low compared to 2022 levels and the current tightness in the domestic labour market eases.

With the increase in COE quota and increase of supply in housing units for rental, private transport, and accommodation inflation are expected to ease over the course of the year. 

For a full-year, MAS said headline and core inflation are projected to average 4.5–5.5% and 3.5–4.5%, respectively. 

“Excluding the transitory effects of the 1%-point increase in the GST to 8%, headline and core inflation are expected to come in at 3.5–4.5% and 2.5–3.5%, respectively,” read the statement.

But downside risks remain such as sharper-than-projected slowdown in the global economy which could induce a general easing of inflationary pressures.