Headline inflation slows to 2.4%, with full-year forecast to be updated in the coming month
Singapore’s inflation slowed more than expected in June, with headline inflation reaching 2.4%, marking its lowest point in three years. This figure, which was lower than the median forecast of 2.7% by private-sector economists, dropped from 3.1% in May, according to data released by the Department of Statistics on Tuesday (Jul 23).
The decline in inflation was largely driven by a drop in private transport costs and lower core inflation. Core inflation, which excludes accommodation and private transport, stood at 2.9%, down from 3.1% in May and below the 3% median forecast.
On a month-to-month basis, the consumer price index (CPI) fell by 0.2% in June, while core CPI remained unchanged.
The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) have stated that the full-year inflation forecast is under review. The updated forecast will be included in MAS’s upcoming monetary policy statement, due by July 31.
Currently, MAS and MTI maintain their projection for full-year headline and core inflation to average between 2.5% and 3.5%. However, excluding the effects of the goods and services tax hike, both headline and core inflation are expected to fall within the range of 1.5% to 2.5%.
Notably, private transport costs fell by 0.7%, driven by declining car and motorcycle prices and slower increases in petrol costs.
