Core inflation falls to 0.5% in July

Thanks to fall in costs of retail & other goods, as well as lower electricity & gas inflation.

Singapore’s core inflation eased to 0.5% in July, even lower than analysts’ forecasts, driven by decline in costs of various commodities.

According to the Monetary Authority of Singapore and the Ministry of Trade and Industry, latest data was also lower than the previous month’s 0.6%.

“This was driven by a fall in the prices of retail & other goods, as well as lower electricity & gas inflation,” the government said.

Consumer price index also eased to 0.6% in July, from 0.8% in June. This was due to a fall in the prices of retail & other goods, as well as lower inflation in accommodation and electricity & gas.

“Singapore’s imported inflation should remain moderate in the near term. Global crude oil prices have continued to ease in recent weeks, while food commodity price increases should also stay contained,” authorities said.

Although the ongoing trade conflicts could be inflationary for some economies, their impact on Singapore’s import prices is likely to be offset by the disinflationary drags exerted by weaker global demand, they added.

Domestically, slower nominal wage growth and continuing increases in labour productivity should contribute to a moderation in unit labour costs. Enhanced government subsidies for essential services will also continue to dampen services inflation.

“Reflecting these factors, both MAS Core Inflation and CPI-All Items inflation are projected to average 0.5% to 1.5% in 2025,” the government said.