With supply chains disrupted and the war in Ukraine still raging, prices are expected to rise the next several months. Prices continued to climb in June with inflation touching its highest levels since 2008.
June’s numbers show that the City State’s effort in trying to rein in costs of imports by strengthening its currency remains an uphill task.
Core inflation, which excludes costs of private transport and accommodation and better reflects the average bills of Singaporeans, went up to 4.4 per cent. It was driven by higher prices of food, retail and utilities, it touched its highest level since November 2008.
Meanwhile, overall inflation, or headline consumer price index (CPI), for June also scaled its highest peak since September 2008, hitting 6.7 per cent year on year. It was fuelled by rising costs of private transport and accommodation.
The authorities have pushed up their projections for the year. They expect headline inflation to come in at between 5 per cent and 6 per cent and core inflation between 3 per cent and 4 per cent.
Food inflation in June hit 5.4 per cent from 4.5 per cent in May.
There was also higher broad-based inflation across services, retail, electricity and gas, accommodation and private transport.
The Monetary Authority of Singapore and the Ministry of Trade and Industry anticipate core inflation to peak in the third quarter before easing towards the end of the year.
Car and accommodation cost increases are also likely to stay firm for the rest of the year, while Singapore’s labour market is projected to remain tight and wage growth strong.
“Amid firm consumer spending, businesses are likely to pass on the increases in the prices of fuel, utilities and other imported inputs, as well as labour costs, to consumer prices,” they added.
While some commodity price rises have levelled off, the authorities still expect the pressure on Singapore’s import prices to remain.
