Singapore’s core inflation rises to 3.3% in October

SECTORS

Services inflation rose to 3.4 per cent in October, up from 3.1 per cent in September, mainly due to a larger increase in holiday expenses. Tuition and other fees, as well as outpatient and hospital services costs, also grew at a faster pace.

Retail and other goods inflation increased to 1.6 per cent in October, as prices of personal care products and medical goods rose more strongly. The prices of clothing and footwear also fell at a slower pace. 

Electricity and gas costs rose 1.8 per cent in October due to higher tariffs. 

Food inflation eased to 4.1 per cent in October as the prices of non-cooked food and prepared meals saw smaller increases. 

Private transport inflation rose to 11.7 per cent in October from 8.5 per cent in September, driven by a faster pace of increase in car prices. 

Accommodation inflation in October edged down to 4.2 per cent in October as the pace of increase in housing rents moderated.

OUTLOOK

Global crude oil prices have been volatile, falling sharply in recent weeks after having risen earlier, said MAS and MTI. 

Global prices for most food commodities, as well as intermediate and final manufactured goods, have continued to moderate.

“These factors, alongside the stronger Singapore dollar trade-weighted exchange rate, should further temper Singapore’s import cost pressures in the quarters ahead.” 

Locally, unit labour costs are expected to rise at a slower pace, in tandem with the gradually cooling labour market. 

“Businesses are likely to continue passing through higher labour costs to consumer prices, but at a more gradual pace,” said MAS and MTI. 

Core inflation is projected to fall to between 2.5 and 3 per cent year-on-year by December.

In early 2024, core inflation is expected to be impacted by the increase in the Goods and Services Tax (GST) rate and seasonal effects.

“However, core inflation should resume a broadly moderating trend over the course of 2024, as import cost pressures decline and tightness in the domestic labour market continues to ease,” said MTI and MAS.