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S'pore's core inflation drops to 1.8% in Dec. 2024, lowest since Nov. 2021

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January 24, 2025, 01:25 PM

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Singapore’s core inflation fell again to 1.8 per cent year on year in December 2024, although the figure was above analysts’ expectations.

The drop was due to a moderation in services inflation, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said on Jan. 23.

Core inflation

Core inflation, which excludes private transport and accommodation costs to be more representative of household expenses, was at 1.9 per cent in November 2024.

At the current level, it is the lowest since November 2021 when core inflation was 1.6 per cent.

For the whole of 2024, core inflation averaged 2.7 per cent, down from 4.2 per cent in 2023.

Headline inflation

Overall inflation, also known as headline inflation, was 1.6 per cent year on year in December — same as November.

"This was because lower core and accommodation inflation was offset by a milder decline in private transport costs," MAS and MTI said.

On a month-on-month basis, overall inflation, which excludes purchases of houses, shares and other financial assets and income taxes as these are non-consumption expenditures, rose 0.3 per cent.

Overall inflation came in at 2.4 per cent for 2024, down from 4.8 per cent the previous year.

Month-on-month inflation numbers

On a month-on-month basis, core inflation increased by 0.5 per cent, while headline inflation rose by 0.3 per cent.

These monthly data show the momentum in prices.

MAS and MTI said inflation forecasts for 2025 will be updated in MAS’ monetary policy statement due on Jan. 24.

Breakdown by sectors

Food inflation increased from 2.4 per cent in November to 2.5 per cent in December due to a larger increase in the prices of non-cooked food.

Retail and other goods inflation rose slightly from 0.1 per cent in November to 0.3 per cent in December as a result of a smaller decline in the prices of personal effects, and a larger increase in the prices of medicines and health products.

Private transport costs fell at a slower pace from -0.7 per cent in November to -0.1 per cent in December as car prices saw a smaller decline.

Services inflation fell further from 2.2 per cent to 1.8 per cent, as holiday expenses fell and public transport costs rose at a slower pace.

Accommodation inflation also fell to 2.2 per cent from 2.4 per cent due to a smaller increase in housing rents.

Electricity and gas inflation remained the same at 2.5 per cent, as prices of electricity and gas rose at similar rates in November and December.

Projection

Global commodity price pressures are projected to stay contained amid favourable supply conditions, MAS and MTI said.

Prices of Singapore's imported manufactured goods have also continued to be on a broad decline due to a gradually strengthening trade-weighted Singapore dollar exchange rate and easing global inflation.

Top photo via Unsplash

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