Singapore all-items CPI up 7.0% in July; MAS Core Inflation up by 4.8% y-o-y

Felicia Tan
2-min read

July's inflation have surpassed the full-year estimates pencilled in by the MAS and MTI.

Singapore’s core and headline inflation have continued to grow in the month of July.

During the month, the country’s all-items CPI rose to 7.0%, surpassing the 5.0% - 6.0% range estimated by the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) for 2022.

In July, MAS Core Inflation, which doesn’t include private transport and accommodation inflation, rose to 4.8% y-o-y, again surpassing the central bank’s full-year estimate of 3.0% - 4.0%.

On a month-on-month (m-o-m) basis, CPI-All Items and core CPI rose by 0.2% and 0.6% respectively.

The pick-up in CPI-All Items inflation was mainly due to the higher inflation for food, electricity & gas and accommodation.

Food inflation stood higher on the back of higher prices for food services and non-cooked food such as meat, fish and seafood. Electricity & gas inflation also rose on the back of higher tariffs.

Accommodation inflation picked up due to higher housing rents.

Meanwhile, the rest of the segments, services and private transport also recorded larger increases due to higher costs for outpatient services, airfares and recreational & cultural services, as well as stronger car prices.

Retail & other goods was the only segment to log a slower pace of increase on the back of lower inflation seen in telecommunication equipment and medicines & health products. The cost of personal effects also fell y-o-y in July.

In its outlook statement, the MAS and MTI said that the elevated figures come as supply chain frictions have eased slightly and commodity prices have levelled off.

“Nevertheless, global inflation is likely to stay elevated in the near term as key commodity markets continue to face supply constraints and labour markets in many major economies remain tight. In addition, the recovery in domestic demand in some regional economies as Covid-19 restrictions are eased could raise inflation in these economies,” reads the statement released on Aug 23.

“Hence, upward pressures on Singapore’s import prices could persist,” it adds.

On the domestic front, the labour market remains tight, keeping wage growth strong.

“Amid firm consumer spending, businesses are likely to pass on increases in the prices of fuel, utilities and other imported inputs, as well as labour costs, to consumer prices,” says the MAS and MTI.

According to the ministries, MAS Core Inflation is expected to remain elevated over the next few months before easing towards the end of the year. As such, the estimates pencilled by the MAS and MTI for the full year remain unchanged.

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