Core inflation climbs again to hit 2.8% in Sept

MAS, MTI expect it to reach around 2% by year end despite rise in past two months

- Chor Khieng Yuit Senior Business Correspondent

Singapore's key consumer prices rose slightly faster than expected in September, with core inflation climbing for the second straight month, official data showed on Oct 23.

Despite the past two months' rise in core inflation, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) still expect it to stay on a gradual moderating trend and reach around 2 per cent by the year end. It is a target that some economists say "looks ambitious", with only three more months to go.

In September, core inflation, which excludes private transport and accommodation costs to better reflect the expenses of households, edged up to 2.8 per cent year on year. This is higher than the 2.7 per cent forecast by economists in a Reuters poll, which was also the rate in August.

It comes after core inflation dropped to 2.5 per cent in July, the lowest level in over two years.

September's increase was due to higher inflation for retail and other goods due to a smaller decline in clothing and footwear prices.

Overall, or headline, inflation eased to 2 per cent year on year in September, from 2.2 per cent in August. The headline figure was, however, higher than the 1.9 per cent forecast in the Reuters poll.

DBS Bank economist Chua Han Teng said this is the slowest rate of price increase in overall inflation since March 2021.