Singapore core inflation rises to 2% in July

Singapore's core inflation rose 2 per cent in July from a year earlier, data from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) showed.

This was driven by an increase in electricity and gas, food, and services inflation, they said in a joint update on Monday (Aug 24).

On a month-on-month basis, core prices, which excludes accommodation and private transport due to their tendency to be significantly influenced by supply-side administrative policies and are volatile, rose by 0.3 per cent in July — up from the 0.1 in June.

Overall inflation, listed as "consumer price index-all items" rose by 0.3 per cent, to 2.2 per cent in July, owing to higher accommodation inflation and the pickup in core inflation.

MAS and MTI said overall inflation, on a month-on-month basis, fell by 0.2 per cent in July.

This excludes non-consumption expenditure such as purchase of houses, shares and other financial assets and income tax.

Breakdown by sectors

The data showed that electricity and gas inflation posted a large increase in July — at 8.7 per cent — reversing the decline recorded in June.

This was largely due to the increase in the regulated electricity tariff in July 2026.

In its previous update posted on July 23, MAS and MTI had stated that higher global energy prices over the period of April to mid-June 2026 will only be reflected in the regulated electricity tariff in the third quarter of 2026, starting from July.

Food costs also edged up from 2.1 per cent in June, to 2.2 per cent in July, as the prices of food services and non-cooked food increased at a faster pace.

Meanwhile, services rose from 1.5 per cent in June, to 1.7 per cent in July, due to airfares and prices for point-to-point transport services increasing at a quicker pace.

Outlook

The agencies noted that elevated global energy prices have led to increase in Singapore's electricity and gas tariffs and higher transportation fares.

They added that with global oil prices remaining high and volatile, coupled with adverse weather conditions that lowered agricultural yields, Singapore's imported food prices rose.

"As higher input costs pass through global supply chains, the prices of a wider range of Singapore’s imported goods and services are expected to pick up in the quarters ahead," MAS and MTI said.

On the domestic front, services unit labour costs are likely to increase at a slower pace this year amid sustained productivity growth and moderating nominal wage growth.

In addition, enhanced government subsidies are expected to continue to have a dampening effect on services inflation.

In view of these factors, MAS said core inflation and consumer price index-all items inflation are still projected to average 1.5 to 2.5 per cent in 2026. 

But core inflation is expected to remain elevated into next year before moderating from around mid-2027, along with the expected easing in global energy prices, the agencies said.

Explaining its projection, MTI and MAS said that the risks to the inflation outlook remain high.

"Renewed disruptions in global energy supplies or worse-than-expected weather conditions could raise Singapore’s imported costs by more than anticipated. 

"Inflation could also be more persistent than projected if robust IT investment growth generates stronger demand spillovers globally and in Singapore."

They also warned that downside risks remain, with any unexpected tightening in global financial conditions or pullback in artificial intelligence-related investment potentially leading to a slowdown in economic activity.

This, in turn, will lower inflation.

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