Singapore core inflation falls to 2.1% in October, lowest in nearly 3 years

SINGAPORE - After two straight months of rising, both core and overall inflation in Singapore dropped sharply in October.

Core inflation, which strips out private transport and accommodation costs to better reflect the expenses of households here, fell to 2.1 per cent year on year, from 2.8 per cent in September. This was the lowest since December 2021, when it was also 2.1 per cent.

The drop in core inflation was led by slower price rises in services, electricity and gas, and retail and other goods, data released on Nov 25 showed.

Overall or headline inflation dropped to 1.4 per cent year on year in October - the lowest reading since March 2021 - from 2 per cent in September. The drop was led by slower accommodation inflation and a steeper fall in private transport costs.

On a month-on-month basis, which shows the momentum in prices, both core inflation and overall inflation dipped 0.3 per cent.

The Ministry of Trade and Industry (MTI) and Monetary Authority of Singapore (MAS) said services inflation, which has been on an easing trend, should slow further through the rest of 2024.

They said accommodation inflation is expected to come in lower in 2025, which would partly offset the expected pick up in private transport inflation.

“Taking these factors into account, overall inflation is expected to come in at around 2.5 per cent for the whole of 2024 and average 1.5 per cent to 2.5 per cent in 2025,” they said.

MAS said in its biannual Macroeconomic Review report on Oct 28 that core inflation has lowered substantially from the 5.5 per cent peak in January 2023 and that even though there is volatility in monthly data in 2024, the declining trend should remain generally intact.

MAS and MTI see inflation hovering around 2 per cent for the rest of 2024.

Core inflation is projected to average 2.5 per cent to 3 per cent in 2024, and step down further to 1.5 per cent to 2.5 per cent in 2025, they said.

[[nid:697194]]

This article was first published in The Straits Times. Permission required for reproduction.