Singapore's consumer price inflation remained stable in July, following a deceleration in the prior month, according to data released on Friday by the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry.
The consumer price index (CPI) increased by 2.4% year-on-year in July, maintaining the same rate as in June, which marked the lowest rate since August 2021. Economists had anticipated a slight rise in inflation to 2.5%.
The stable inflation rate in July was attributed to a slowdown in accommodation and core inflation, counterbalanced by an uptick in private transport costs.
Core inflation eased to 2.5% in July from 2.9% in June, influenced by decreased inflation across all major core CPI categories.
Service inflation reduced to 2.9% from 3.4%, while accommodation inflation saw a minor decrease to 3.1% from 3.3%. Food prices similarly experienced a slight decline, rising at 2.7%.
Conversely, private transport costs rebounded by 0.9%, compared to a 0.7% decline in June. This rebound was driven by smaller reductions in the prices of cars and motorcycles, coupled with a sharper increase in gasoline prices.
The MAS predicts that core inflation will continue on a gradual moderating trend throughout the rest of the year, with a further decline expected in the fourth quarter of 2024.
For the entirety of 2024, core inflation is projected to average between 2.5% and 3.5%, while CPI-All Items inflation is expected to range from 2.0% to 3.0%.
However, MAS also highlighted risks affecting the inflation outlook. Domestically, a reacceleration in wage growth could occur due to stronger-than-expected labor market conditions. Additionally, an upward pressure on global energy and food commodity prices, along with rising shipping costs, remains a concern.
