Headline inflation rate unchanged at 2.4% due to rise in transport costs

SINGAPORE: Singapore’s headline inflation rate held 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 remained unchanged 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) saw a slight decline of 0.1%, reflecting a marginal dip in general price levels across the economy.

The Monetary Authority of Singapore’s (MAS) core inflation, which excludes the costs of accommodation and private transport, eased to 2.5% YoY in July, down from 2.9% in June.

This moderation was largely driven by slower price increases in sectors such as food, services, and retail goods.

Accommodation inflation also showed signs of cooling, with the rate dipping to 3.1% YoY. SingStat attributed this to a more modest rise in housing rents compared to previous months.

The food inflation rate eased slightly to 2.7% YoY, down from 2.8% in June. Services inflation also decelerated, moving from 3.4% YoY in June to 2.9% YoY in July. Retail and other goods also saw price movements slow, with inflation falling to 0.3% YoY from 0.5% in June.

However, private transport inflation saw a significant turnaround, rising to 0.9% YoY in July from a negative 0.7% in June. This was primarily driven by smaller declines in the prices of cars and motorcycles, coupled with a steeper increase in petrol prices.

Looking ahead, the Ministry of Trade and Industry (MTI) and MAS expect core inflation to continue its gradual downward trend in the coming months, with a further decline anticipated 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 forecast to range between 2.5% and 3.5%.

MTI and MAS also noted that excluding the transitory effects of the one-percentage-point Goods and Services Tax (GST) hike, which brought the rate to 9%, headline and core inflation are expected to come in at a more moderate range of 1.5% to 2.5%. /TISG