Impact of Public Transport Fare Hike on Singapore’s Inflation Projections
In a recent statement, Singapore’s Trade and Industry Minister Gan Kim Yong revealed that the 7% hike in public transport fares, scheduled to take effect on December 23, 2023, is anticipated to contribute 0.17 percentage points to the country’s core inflation in 2024. Public transport fares, including both bus and MRT (Mass Rapid Transit) services, make up 2.5% of Singapore’s core inflation basket, which excludes private transport-related costs. Additionally, public transport fares account for 1.6% of the overall Consumer Price Index (CPI) basket.
The fare increase is expected to have a modest but notable effect on inflation, as the country continues to grapple with rising living costs. Minister Gan also addressed concerns over the impact of Certificate of Entitlement (COE) prices on inflation but noted that projecting COE prices for the next year remains uncertain. Car prices, which include COE premiums, represent a significant 7.4% of Singapore’s headline inflation basket. The government’s outlook for inflation in 2024 will thus depend on various factors, including transportation costs.
