Singapore's core inflation rises to 2% in July on higher electricity and gas, services, food prices

In July, Singapore's core inflation climbed to 2% year-on-year, an increase from 1.6% in June, according to official data released on Monday (Aug 24). This rise was attributed to higher electricity and gas prices, services, and food costs, according to the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI).

The core inflation rate, which does not include accommodation and private transport, grew by 0.3% month-on-month in July. Overall inflation, measured by the Consumer Price Index-All Items, reached 2.2% in July from 1.9% in June, driven by higher accommodation prices along with core inflation. On a month-over-month basis, overall inflation decreased by 0.2% in July.

Electricity and gas prices surged, rising from an 8.4% monthly increase in June to 8.7% in July, primarily due to a sharp increase in electricity prices. Services inflation also rose to 1.7% from 1.5% in June, as airfares and point-to-point transport services prices climbed more rapidly. Food inflation edged up from 2.1% in June to 2.2% in July, as food services and non-cooked food prices increased faster.

Accommodation inflation picked up due to higher housing rents and maintenance fees, reaching 0.8% in July from 0.6% in June. Private transport inflation moderated, falling from 8.4% in June to 8% in July. While the MAS and MTI anticipate broader price pressures in the coming quarters as higher input costs trickle through global supply chains, they note that domestic unit labor costs in the services sector are expected to rise slowly due to sustained productivity growth and moderate wage inflation.

Furthermore, government subsidies are likely to continue cushioning services inflation. In summary, MAS and MTI project core inflation and overall inflation to average 1.5% to 2.5% for 2026, with core inflation remaining elevated into 2027 before moderating more noticeably from mid-year, as global energy prices are expected to ease.