Singapore core inflation rises to 1.6% in June

Singapore's core inflation rose 1.6 per cent in June from a year earlier, official data from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) showed.

This was driven by an increase in food, services and retail and other goods inflation, the agencies said in a joint update on Thursday (July 23).

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

Overall inflation, listed as "consumer price index-all items" rose by 0.1 per cent, to 1.9 per cent in June, owing to higher accommodation inflation and the pickup in core inflation.

MAS and MTI said overall inflation, on a month-on-month basis, was unchanged in June.

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

Breakdown by sectors

The date showed that food inflation rose from 1.8 per cent to 2.1 per cent in June as the prices of both non-cooked food and food services increased at a faster pace.

Services inflation rose from 1.3 per cent in May, to 1.5 per cent in June on account of larger increases in airfares and holiday expenses.

Accommodation inflation inched up by 0.1 percent from May, to 0.6 per cent in June, due to a faster pickup in housing rents.

Retail and other goods inflation edged up from 1.6 per cent in May to 1.7 per cent in June on the back of larger increases in the prices of both furniture and other recreational goods, while private transportation inflation dipped by 0.2 per cent, to 8.4 per cent in June due to a smaller increase in petrol prices.

Meanwhile, electricity and gas prices fell at a slower from, from 3 per cent in May to 2.9 per cent in June due to a smaller decline in electricity prices.

However, MAS and MTI also 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.

This is because the regulated electricity tariff for each quarter is set based on the average natural gas prices in the first two and a half months of the preceding quarter, among other factors.

Outlook

The agencies noted that global energy prices remain elevated relative to their levels in 2025.

"As higher energy costs pass through global supply chains with a lag, they are expected to raise production and transport costs for a wider range of Singapore’s imported goods and services over time," MAS and MTI said.

On the domestic front, services unit labour costs are likely to increase at a slower pace this year as nominal wage growth eases from the firm levels last year. 

In addition, domestic consumer spending could turn more cautious amid the economic uncertainty.

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

Explaining its projection, the agencies said: "At this juncture, the risks to the inflation outlook remain tilted to the upside. A slower-than-expected resumption in global energy supplies or continued shortages in key intermediate inputs to regional supply chains could further raise imported costs for Singapore. 

"However, downside risks are also present. A stronger-than-expected tightening in global financial conditions could lead to a slowdown in economic activity and thus lower inflation."

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