Headline inflation hits 14-year high in July

It rose to 7% YoY.

Headline inflation rose to 7.0% YoY in July, marking the fastest pace of increase since June 2008.

The rate of increase in July was also faster compared to June when headline inflation rose to 6.7% YoY.

The further acceleration of the headline or consumer price index (CPI)-all items inflation was driven by stronger increases in the prices of food (6.1% vs 5.4%), electricity and gas (24.0% vs 20.0%), according to the Ministry of Trade and Industry (MTI) and Monetary Authority of Singapore (MAS).

MAS and MTI said food prices edged up due to “steeper increases in the prices of both food services and non-cooked food,” whilst electricity and gas rose on the back of a “larger increase in electricity and gas tariffs.”

Meanwhile, inflation for other expenditure divisions namely accommodation, services, private transport, and retail and other goods likewise picked up in July to 4.6%, 3.5%, 22.2% and 2.8%, respectively.

Like headline inflation, the MAS Core Inflation also rose at a faster clip in July, rising to 4.8% YoY. The July MAS Core inflation also marks the fastest pace of increase since November 2008.

Looking ahead, MTI and MAS said upward pressures on Singapore’s import prices could persist.

“Global inflation is likely to stay elevated in the near term as key commodity markets continue to face supply constraints and labour markets in many major economies remain tight,” the two agencies said.

“In addition, the recovery in domestic demand in some regional economies as COVID-19 restrictions are eased could raise inflation in these economies,” they added.

For the whole year, headline inflation is forecast to come in at 5.0% to 6.0%, whilst MAS core inflation is projected to hit 3.0$ to 4.05%.

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