Headline inflation unchanged as transport costs offset easing in accommodation

Private transport inflation rose to 0.9% YoY.

The headline inflation rate in Singapore remained steady at 2.4% YoY in July, according to the Department of Statistics (SingStat).

On an MoM basis, CPI-All Items fell by 0.1%.

SingStat attributed the unchanged rate to the pickup in private transport costs that offset the slowdown in accommodation and core inflation.

MAS core inflation in July eased to 2.5% YoY from 2.9% YoY in June.

Meanwhile, the accommodation inflation rate dipped to 3.1% YoY as housing rents rose modestly. 

Other expenditure divisions which saw slower price movements in July were food (2.7% YoY from 2.8% YoY), services (2.9% YoY from 3.4% YoY), and retail and other goods (0.3% YoY from 0.5% YoY).

On the other hand, private transport inflation rose from -0.7% YoY in June to 0.9% YoY in July due to smaller
declines in the prices of cars and motorcycles alongside a steeper increase in petrol prices.

The Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) expect core inflation to "stay on a gradual moderating trend over the rest of
the quarter and step down further in Q4 2024."

For 2024, MTI and MAS expect headline and core inflation to average 2.0%-3.0% and 2.5%-3.5%, respectively.

Excluding the transitory effects of the 1%-point increase in the GST rate to 9%, the agencies expect headline and core inflation to come in at 1.5%-2.5%