Core inflation rises to 2% in July; electricity prices rise sharply

In July, Singapore's core inflation rate increased to 2% from 1.6% in June, according to the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI). The rise was largely attributed to electricity and gas prices, services, and food segments. Core inflation, excluding accommodation and private transport, remained below the median estimate of economists at 2.2% per month.

Headline inflation rose to 2.2% from 1.9% in June, also due to increased accommodation inflation and higher core inflation. Despite this, the headline figure was still below the median economists' prediction of 2.4%. On a month-on-month basis, the core CPI increased by 0.3% while the all-items CPI declined by 0.2%. The MAS and MTI kept their forecast range for both core and headline inflation at 1.5 to 2.5% for the year 2026, but their outlook shifted significantly from the previous month.

They now attribute the inflation rise to elevated global energy prices, which have led to higher electricity and gas tariffs, transportation fares, and imported food prices. The authorities also warned that renewed disruptions in global energy supplies or adverse weather conditions could further push imported costs up, while a slowdown in AI-related investment and unexpected tightening in global financial conditions could act as downside risks.