SINGAPORE: The Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) said on Thursday (Nov 23) that both headline and core inflation rose in October.
Headline inflation, which takes into consideration the total inflation of an economy, was at 4.7 per cent on a year-on-year basis, up from 4.1 per cent in September. Meanwhile, core inflation, which excludes food and energy prices, was at 3.3 per cent year-on-year, up from 3.0 per cent the month before, when it was at the lowest it has been since March 2022.
MAS explained the rise in core inflation as being due to higher inflation for services, retail, and other goods, as well as increased electricity and gas costs. As for higher headline inflation, this reflected higher private transport inflation in addition to the rise in core inflation.
“On a month-on-month (m-o-m) basis, core CPI (consumer price index) increased by 0.4 per cent in October, as prices across all broad core CPI categories rose. The increase, coupled with higher private transport costs, caused CPI-All Items to rise by 0.2 per cent,” MAS added.
The joint announcement from MAS and MTI explained the rise in inflation further, saying that the inflation in private transport was driven by a faster pace of increase in car prices. As for inflation in services, this was due to a bigger increase in holiday expenses. Tuition and other fees, as well as outpatient and hospital services costs, also climbed at a speedier rate. The prices of personal care products and medical goods rose more strongly, and the prices of clothing and footwear decreased at a slow pace, which is why retail and other goods inflation is higher. Electricity and gas costs increased as well because of higher tariffs.
However, food inflation has eased, with the prices of non-cooked food and prepared meals seeing smaller increases. Similarly, accommodation inflation edged down as the pace of increase in housing rents moderated.
“Global crude oil prices have been volatile, falling sharply in recent weeks after having risen earlier. Meanwhile, global prices for most food commodities, as well as intermediate and final manufactured goods, have continued to moderate. These factors, alongside the stronger S$ trade-weighted exchange rate, should further temper Singapore’s import cost pressures in the quarters ahead,” MAS and MTI noted in its outlook summary.
The agencies noted that core inflation is projected to edge down to between 2.5 to 3.0 per cent year-on-year next month. However, core inflation is expected to be impacted by the increase in the GST rate as well as seasonal effects early next year. /TISG