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Singapore's core inflation rose to a new high of 4.8 per cent in July 2022, according to data from the Department of Statistics on Aug. 23, up from 4.4 per cent in June.
It marks the second straight month in which it exceeded the 4 per cent rate last breached during the global financial crisis.
Headline inflation: 7%
July’s headline inflation, which includes accommodation and private transport costs, was 7 per cent, up from 6.7 per cent in June and representing another multi-year high.
But the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) maintained their full-year forecast ranges of 3 to 4 per cent for core inflation and 5 to 6 per cent for headline inflation.
They had raised these forecasts in July.
MAS and MTI said in a joint statement that increasing inflation was due to a larger increase in electricity and gas tariffs, which recorded the most significant increase, going up by 24 per cent from the year before, in an acceleration from June’s 20 per cent increase.
Food inflation was 6.1 per cent, up from 5.4 per cent in June, due to price increases for both cooked and non-cooked food.
Private transport and accommodation inflation also intensified in July.
Private transport inflation rose to 22.2 per cent due to an increase in car prices, up from 21.9 per cent in June.
Accommodation inflation was 4.6 per cent, up from 4.2 per cent before, as housing rents rose at a faster pace.
Price increases for retail and other goods rose at a slower rate of 2.8 per cent, compared to 3.1 per cent in June.
Inflation to stay elevated till end-2022
MAS and MTI said they continue to expect core inflation to stay elevated over the next few months before easing towards the end of the year.
Car and accommodation cost increases are also likely to stay firm for will the end of 2022, they added.
Domestic businesses are likely to pass on cost increases to consumer prices, with the labour market remaining tight, and with consumer spending firm, MAS and MTI said.
The inflation outlook by MAS and MTI highlighted that global inflation is likely to stay elevated in the near term, even though global supply chain frictions have eased slightly and some commodity prices have levelled off.
Top photo via Unsplash
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