SINGAPORE: Singapore’s core inflation fell to 1.0 per cent year-on-year in January from 1.2 per cent in December, official data showed on Monday (Feb 23).
The figure was due to a moderation in services inflation, the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) said in a joint news release.
It was lower than the median forecast of 1.5 per cent in a Reuters poll of economists.
On a month-on-month basis, core prices - which exclude accommodation and private transport - fell 0.3 per cent in January.
Overall inflation, as measured by the Consumer Price Index-All Items, rose to 1.4 per cent in January from 1.2 per cent in December, mainly due to higher accommodation inflation that more than offset lower core and private transport inflation.
On a month-on-month basis, overall inflation - which excludes non-consumption expenditures such as purchases of houses, shares and other financial assets and income taxes - fell by 0.5 per cent in January.
According to official data, services inflation fell to 1.5 per cent in January from 1.9 per cent the month before.
This was led by a larger fall in airfares and a decline in general, vocational and higher education fees, MAS and MTI said.
Electricity and gas prices remained unchanged at -4.2 per cent in January, as electricity tariffs declined at a similar pace as in December.
Food inflation also remained unchanged at 1.2 per cent, as the prices of non-cooked food and food services rose at similar rates in January and December.
Retail and other goods inflation rose to 0.5 per cent in January from 0.0 per cent in December, on account of an increase in the cost of other appliances for personal care.
Private transport inflation eased to 2.7 per cent in January from 3.7 per cent in December on account of a smaller increase in car prices and a steeper decline in petrol prices.
Accommodation inflation picked up to 1.9 per cent in January, up from 0.3 per cent in December, due to a larger increase in the cost of housing maintenance and repairs.
MAS and MTI said Singapore’s imported costs should remain contained, as global crude oil prices have risen in recent weeks but are expected to remain lower than levels a year ago
Regional consumer price inflation should pick up modestly after their weak outturns last year, although broadly subdued producer prices in Asia should cap the extent of inflationary pressures.
“On the domestic front, unit labour cost growth should edge higher in 2026, but the extent of pick-up will be dampened by sustained productivity growth,” said MAS and MTI.
“Meanwhile, private consumption demand is likely to remain steady, underpinned by continued real wage increases.”
Reflecting these factors, MAS and MTI said core and overall inflation are projected to average 1.0–2.0 per cent in 2026.
However, the inflation outlook remains subject to uncertainties, said MAS and MTI, as stronger-than-expected growth could bolster demand-pull inflationary pressures.
“Supply shocks, including those triggered by geopolitical developments, could also lift imported costs,” they said. “Conversely, a large, discrete shock to growth from macroeconomic and financial stressors could dampen inflation.”
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The figure was due to a moderation in services inflation, the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) said in a joint news release.
It was lower than the median forecast of 1.5 per cent in a Reuters poll of economists.
On a month-on-month basis, core prices - which exclude accommodation and private transport - fell 0.3 per cent in January.
Overall inflation, as measured by the Consumer Price Index-All Items, rose to 1.4 per cent in January from 1.2 per cent in December, mainly due to higher accommodation inflation that more than offset lower core and private transport inflation.
On a month-on-month basis, overall inflation - which excludes non-consumption expenditures such as purchases of houses, shares and other financial assets and income taxes - fell by 0.5 per cent in January.
SECTORS
According to official data, services inflation fell to 1.5 per cent in January from 1.9 per cent the month before.
This was led by a larger fall in airfares and a decline in general, vocational and higher education fees, MAS and MTI said.
Electricity and gas prices remained unchanged at -4.2 per cent in January, as electricity tariffs declined at a similar pace as in December.
Food inflation also remained unchanged at 1.2 per cent, as the prices of non-cooked food and food services rose at similar rates in January and December.
Retail and other goods inflation rose to 0.5 per cent in January from 0.0 per cent in December, on account of an increase in the cost of other appliances for personal care.
Private transport inflation eased to 2.7 per cent in January from 3.7 per cent in December on account of a smaller increase in car prices and a steeper decline in petrol prices.
Accommodation inflation picked up to 1.9 per cent in January, up from 0.3 per cent in December, due to a larger increase in the cost of housing maintenance and repairs.
OUTLOOK
MAS and MTI said Singapore’s imported costs should remain contained, as global crude oil prices have risen in recent weeks but are expected to remain lower than levels a year ago
Regional consumer price inflation should pick up modestly after their weak outturns last year, although broadly subdued producer prices in Asia should cap the extent of inflationary pressures.
“On the domestic front, unit labour cost growth should edge higher in 2026, but the extent of pick-up will be dampened by sustained productivity growth,” said MAS and MTI.
“Meanwhile, private consumption demand is likely to remain steady, underpinned by continued real wage increases.”
Reflecting these factors, MAS and MTI said core and overall inflation are projected to average 1.0–2.0 per cent in 2026.
However, the inflation outlook remains subject to uncertainties, said MAS and MTI, as stronger-than-expected growth could bolster demand-pull inflationary pressures.
“Supply shocks, including those triggered by geopolitical developments, could also lift imported costs,” they said. “Conversely, a large, discrete shock to growth from macroeconomic and financial stressors could dampen inflation.”
Continue reading...