Singapore’s core inflation stays at 0.6% in June, below economists’ forecast

SINGAPORE: Singapore’s core inflation, which excludes private road transport and accommodation costs, was at 0.6% in June — the same as in May but lower than the 0.7% forecast in a Reuters poll of economists.

The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said that while prices for retail and some other goods went up, this was offset by lower inflation in the other major consumer price index (CPI) categories, Reuters reported.

Headline inflation, which was also the same in May, was lower than expected at 0.8% in June, compared to the 0.9% forecast by economists. In addition, higher transport inflation was offset by lower inflation in accommodation.

MAS and MTI said imported inflation is expected to stay moderate, as global crude oil prices have eased and food commodity price increases are likely to remain contained. They added that while trade tensions could be inflationary in some economies, the impact on Singapore’s import prices is expected to be offset by weaker global demand.

Government subsidies for key services such as healthcare, preschool education, and public transport will also help to keep a lid on price increases, especially for services.

Local unit labour costs are expected to rise gradually, as wage growth slows, even as productivity improves. Government subsidies for essential services like preschool education, public healthcare, and public transport will also help keep services inflation down.

This latest inflation data comes just ahead of MAS’ next policy review on Jul 30. In its April review, the central bank eased monetary policy for the second time this year, after a similar move in January. It also lowered its 2025 inflation forecast to between 0.5% and 1.5% for both core and headline inflation and revised Singapore’s growth outlook to between 0% and 2% from 4.4% last year. /TISG

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