According to data released by the Monetary Authority of Singapore and the Ministry of Trade and Industry, the consumer price index increased 2.0 percent on an annual basis in September, slower than the 2.2 percent increase in August.
This was the lowest inflation rate since March 2021, when prices had risen 1.3 percent. However, core inflation increased and remained above 2 percent, while Singapore’s consumer price inflation further moderated in September to the lowest in three and a half years due to a steeper decline in private transport costs, official data showed Wednesday.
Core inflation, meanwhile, surged to a three-month high for the second consecutive month. An increase in retail and other goods inflation caused the core rate to rise from 2.7 percent in August to 2.8 percent.
Due to a greater decline in automobile prices and lower gasoline prices, private transportation costs decreased at a faster rate of 2.4% compared to the previous year.
Food inflation slightly decreased to 2.6 percent from 2.7 percent, while accommodation inflation decreased to 2.7 percent from 2.9 percent due to a less significant increase in housing rents. Service inflation, on the other hand, stayed constant at 3.3%.
According to the MAS, MAS core inflation will continue its slow but steady decline and be approximately 2 percent by the end of 2024.
For the entirety of 2024, CPI-All Items inflation is predicted to be around 2.5 percent, with an average of 1.5 to 2.5 percent in 2025.
The MAS also stated that there is a fair distribution of risks associated with the inflation outlook. Unit labor cost growth may slow down domestically if labor market conditions improve more than anticipated.
A substantial global economic slowdown may result in a larger easing of cost and price pressures, while rising geopolitical tension may raise concerns about increased imported costs.
As inflation slowed and economic growth strengthened, the Singaporean central bank this Thursday maintained its monetary policy for the sixth straight meeting. In October 2022, the bank last tightened monetary policy.
Conclusion
Singapore’s latest inflation data shows a gradual easing of price pressures, with consumer price inflation slowing to its lowest rate in three and a half years at 2.0% in September, down from 2.2% in August.
However, core inflation—which excludes volatile items like transport and housing—rose slightly, signaling persistent inflationary pressures in areas like retail goods and services. The decline in private transport costs, particularly in automobile and gasoline prices, played a significant role in the overall inflation moderation.
While the Monetary Authority of Singapore expects core inflation to steadily decrease through 2024, the balance of risks remains tied to both global economic conditions and domestic labor market performance. The central bank’s decision to maintain its monetary policy reflects confidence in managing inflation amid these shifting dynamics.