(Globaly.org) 

Core inflation, which excludes private transport and accommodation to better reflect household expenses, increased by 0.6% in June 2024, the same as in May.



This marks a slight decrease from the 0.7% level recorded in April, which was up from the four-year low of 0.5% in March, as noted by the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on July 23.

Despite the low inflation numbers, most economists believe that MAS will not ease monetary policy on July 30.

Overall, or headline, inflation was at 0.8% in June, also unchanged from May, as higher private transport expenses were balanced by a smaller increase in accommodation costs.

Both core and overall inflation readings were lower than economists' forecasts in a Bloomberg poll.

In June, two categories experienced higher inflation: retail and other goods, and private transport.

Retail and other goods inflation stood at zero percent after dropping 1% in May and 1.2% in April, mainly due to pricier clothing and footwear.

Private transport costs increased by 2% year on year, up from a 1.1% rise in May and a 1.3% increase in April. This increase was driven by a sharper rise in car prices and a slower decline in petrol costs.

Other categories either had lower prices or slower price increases.

Electricity and gas costs fell by 3.9% year on year in June, following a 3.7% decline in May.

Food inflation eased to 1% in June from 1.1% in May.

Similarly, a smaller increase in rents led to lower accommodation inflation, which rose by 1% year on year in June compared to 1.1% in May.

Services inflation dropped from 1.1% in May to 0.7% in June due to a steeper decline in holiday expenses, airfares, and the cost of information and communication services.

MAS and MTI mentioned that Singapore's imported inflation should remain moderate as oil prices have decreased recently. They also stated that the increases in food commodity prices should be contained.

They reiterated their statement from June, mentioning that while ongoing trade conflicts could cause inflation in some economies, the impact on Singapore's import prices is likely to be offset by the disinflationary effects of weaker global demand.

MAS and MTI have maintained their forecasts that core and overall inflation will average between 0.5% and 1.5% in 2025, but they stated that "the uncertainties... remain high amid increased risks in the external environment."

OCBC chief economist Selena Ling mentioned that MAS is not in a rush to ease monetary policy as it waits for the impact of tariffs.

Economist Ms. Sheana Yue from Oxford Economics added that Singapore's economy remains strong, giving the central bank reason to hold off on policy easing.

Ms. Yue noted that core inflation is well below MAS's soft target of around 2%, providing room to further loosen monetary policy if necessary.

DBS Bank senior economist Chua Han Teng expects MAS to take a "wait and see" approach and keep the option open for further easing in October. If MAS eases in October, it will be the third time this year that monetary policy has been loosened.

 report from the Department of Statistics (SingStat) on July 23 showed that overall inflation for households increased at a slower rate of 0.9% year on year, down from a 1.8% increase in the second half of 2024.

In the first half of 2025, households in the top 20% income bracket experienced a 1.2% increase, while middle and lower-income earners saw price increases of 0.8%.

Excluding rents of owner-occupied accommodation, the price increase was 0.6% for the lowest-income group, 0.7% for the middle-income group, and 1.3% for the high-income group.

SingStat noted that the main contributors to inflation in the first half were accommodation, health insurance, food,

 and more expensive cars. These inflationary pressures were offset by lower holiday expenses and cheaper electricity.

The top earners felt the most impact as they spent more on cars compared to those in other income tiers, according to SingStat.

Ms. Yue from

Oxford Economics mentioned that low-income earners had some relief as price increases in food and other essentials like utilities eased in the first half. The government also provided increased support to help them cope with the cost of living.

Ms. Yue expects the overall pace of price growth to continue slowing as more support measures, such as the $600 worth of SG60 vouchers, are rolled out over the rest of 2025.