Singapore's inflation accelerated to a near two-year peak in July, driven by elevated energy prices and electricity costs stemming from the Iran conflict, though the figure still came in below market forecasts.
The city-state reported a 2.2% year-on-year increase in consumer prices last month, while economists had anticipated a 2.3% rise, with June inflation recorded at 1.9%. On a month-on-month basis, the consumer price index dipped by 0.2%.
Data jointly released by the Monetary Authority of Singapore and the Ministry of Trade and Industry revealed that high global energy prices have pushed up costs for electricity, gas, and public transportation fares. The statement noted that international oil prices remain elevated and highly volatile, while adverse weather conditions in key import source regions are expected to reduce agricultural output, thereby raising the prices of imported food in Singapore. The announcement further indicated that additional imported goods and services are likely to see upward price pressures in the coming period.
The Monetary Authority of Singapore, which unexpectedly tightened monetary policy in July, had previously cautioned that rising fuel and electronic component costs could elevate imported inflation over the coming quarters. Core inflation, which excludes private transportation and accommodation costs, climbed to 2%, below the market expectation of 2.2%.
In response to the impact of the Iran conflict, Singapore has rolled out two relief packages totaling approximately S$2 billion, encompassing cash payouts and vouchers for residents, alongside tax rebates for businesses. The inflation data comes as Singapore has significantly raised its full-year GDP growth forecast for 2026, now projecting an expansion of 4.5% to 5.5%, nearly double the lower bound of the previous 2% to 4% range.
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