S'pore core inflation falls to 2.1% in Oct. 2024

Core inflation eased to 2.1 per cent on a year-on-year basis in October 2024 from 2.8 per cent in September, due to a moderation in services, electricity and gas, as well as retail and other goods inflation.

Headline inflation – which includes private transport and accommodation – also declined to 1.4 per cent year-on-year from 2 per cent in September, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI).

This was driven by slower accommodation inflation and a steeper decline in private transport costs.

Private transport costs fell 2.5 per cent in October, more than the 2.4 per cent decrease in September, due to a bigger drop in car prices.

A moderation in services inflation also contributed to lower headline inflation.

Services inflation slowed mainly due to smaller increases in the costs of holiday expenses and healthcare services.

On a month-on-month basis, core inflation and headline inflation both fell by 0.3 per cent.

Projections

"Although global energy prices have been volatile in recent weeks, they have on average

remained below the levels a year ago," MAS and MTI said.

Singapore's manufactured goods prices have been on a broad decline, in tandem with easing global inflation and the gradually strengthening trade-weighted Singapore dollar exchange rate.

Unit labour costs are projected to rise more gradually alongside moderating nominal wage growth and improving productivity.

Correspondingly, services inflation, which has been on an easing trend, should slow further over the rest of 2024, the authorities predict.

Core inflation is expected to remain at around 2 per cent through to end-2024, and is projected to average 2.5 to 3 per cent in 2024 as a whole.

Core, as well as headline inflation, is expected to average to 1.5 to 2.5 per cent in 2025.

Accommodation inflation is forecast to come in lower next year, and is predicted to offset an anticipated pickup in private transport inflation amid the firm demand for cars.

Top photo via Lim Weixiang/ Mothership