23-8-2024 (SINGAPORE) Singapore’s economic landscape has taken an unexpected turn as core inflation rates dropped more sharply than anticipated in July, offering a glimmer of hope for households grappling with the cost of living.
The city-state’s core inflation, a key metric that excludes private transport and accommodation costs to provide a more accurate reflection of everyday household expenses, fell to 2.5% year-on-year. This figure not only surpassed analysts’ predictions of 2.9% but also marked the lowest level since February 2022, when it stood at 2.2%.
This latest data, released jointly by the Ministry of Trade and Industry and the Monetary Authority of Singapore (MAS), reveals a continued downward trend, following June’s 2.9% core inflation rate. The consecutive decline suggests a potential easing of inflationary pressures that have been a cause for concern among policymakers and citizens alike.
Headline inflation, which includes all consumer price index components, remained steady at 2.4% year-on-year, unchanged from June but still outperforming market expectations of 2.5%. This stability was primarily attributed to a deceleration in accommodation costs, offsetting increases in other sectors.
A closer look at month-on-month figures provides further insight into the current inflationary momentum. Core inflation experienced a slight dip of 0.1%, while overall inflation decreased by 0.3%, indicating a marginal but noteworthy cooling of price pressures in the short term.
Despite these encouraging signs, the MAS has maintained its inflation outlook for 2024. Core inflation is projected to average between 2.5% and 3.5%, while overall inflation is expected to range from 2% to 3%. These forecasts align with the revised projections announced by the MAS on July 26, when it trimmed its overall inflation estimate for 2024.
