Core inflation in Singapore unchanged, but uncertainties in outlook remain high

Economists do not expect MAS to ease monetary policy despite low numbers

- Chor Khieng Yuit

Core inflation was unchanged in June, with pricier retail and other goods offset by lower costs in categories such as food and services.

Core inflation, which excludes private transport and accommodation to better reflect household expenses, rose 0.6 per cent over June 2024, the same level as May. It marks a slight dip from the 0.7 per cent level recorded in April, which was up on the four-year low of 0.5 per cent in March, noted the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on July 23.

Most economists believe the MAS will not ease monetary policy on July 30, despite the low inflation numbers.

Overall—or headline—inflation came in at 0.8 per cent in June, also unchanged from May, as higher private transport expenses were offset by a smaller increase in accommodation costs.

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

Two categories registered higher inflation in June—retail and other goods, and private transport. Retail and other goods inflation registered zero per cent after falling 1 per cent in May and 1.2 per cent in April. This was mainly due to pricier clothing and footwear.

Private transport costs rose 2 per cent year on year, after a 1.1 per cent increase in May and a 1.3 per cent rise in April. The increase was fuelled by a steeper rise in car prices and a slower pace of decline in the cost of petrol.