Core Inflation Hits 2.5% in July, the Lowest Level in Over Two Years, Prompting Speculation on Monetary Policy Adjustments
Private-sector economists are speculating that the Monetary Authority of Singapore (MAS) could ease monetary policy settings as soon as its next meeting in October, following the release of inflation data showing a more-than-expected slowdown.
Core inflation, which excludes accommodation and private transport, came in at 2.5% in July, a decline from June’s 2.9%. This marks the lowest rate since February 2022, when core inflation was at 2.2%. The data, released on Friday, showed that most broad consumer price index (CPI) categories experienced lower inflation in July, with easing services costs leading the decline.
Headline inflation remained unchanged from June at 2.4%, slightly below the median forecast of 2.5% by economists polled by Bloomberg. Although private transport costs saw an increase, this was offset by a decrease in accommodation inflation. This mix of inflation trends has led some economists to expect that MAS may consider policy easing in the coming months to sustain economic growth amid lower inflation pressures.
