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HomesingaporeSingapore’s core inflation eases to 3% in September, lowest since March 2022

Singapore’s core inflation eases to 3% in September, lowest since March 2022

SINGAPORE: Singapore’s core inflation continued on a downward trend, falling to 3 per cent year-on-year in September, official data showed on Monday (Oct 23).

The decline from 3.4 per cent in August was due to lower inflation for food, and retail and other goods, the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) said.

The last time core inflation was lower than 3.0 per cent was in March 2022, when it was 2.9 per cent.

Core inflation had risen to 5.5 per cent in January and February this year, a 14-year high, before trending downwards in the following months.

Core inflation excludes accommodation and private transport costs.

Overall inflation inched higher to 4.1 per cent on a year-on-year basis in September, up from 4.0 per cent in the preceding month.

“This reflected a pickup in private transport inflation which more than offset the decline in core and accommodation inflation,” said MTI and MAS.


Food inflation declined to 4.3 per cent in September as the prices of non-cooked food and prepared meals rose more slowly.

Retail and other goods inflation fell to 0.9 per cent on the back of a fall in the prices of clothing and footwear, and personal effects, while the prices of personal care and medical goods rose more slowly. 

Accommodation inflation in September eased from 4.4 per cent to 4.3 per cent year-on-year as the pace of increase in housing rents moderated.

Electricity and gas costs in September fell at the same rate as August at -1.4 per cent, as a smaller decline in electricity prices was broadly offset by a steeper fall in gas prices.

Services inflation in September was unchanged at 3.1 per cent, as a larger increase in the cost of telecommunication services was offset by a smaller increase in holiday expenses.

Private transport inflation surged from 6.3 per cent to 8.5 per cent in September as car prices saw a steeper increase while petrol prices also rose.


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Core inflation is expected to moderate further over the next few months as imported costs stay low compared to year-ago levels and the current tightness in the domestic labour market eases, said MTI and MAS.

While core inflation in early 2024 is “expected to be impacted by the (one percentage point) increase in the GST rate as well as seasonal effects”, it should “resume a broadly moderating trend over 2024”, the authorities added.

For 2023 as a whole, headline inflation is expected to average around 5 per cent, while core inflation is expected to average around 4 per cent.

In 2024, headline and core inflation are projected to average between 3 per cent to 4 per cent and 2.5 per cent to 3.5 per cent respectively.

Excluding the transitory effects of the one percentage point increase in GST, headline and core inflation are expected to come in at 2.5 per cent to 3.5 per cent and 1.5 per cent to 2.5 per cent respectively.

Singapore’s core inflation is projected to fall to between 2.5 per cent to 3.0 per cent year-on-year by December, “notwithstanding some monthly volatility from electricity and gas prices”, MTI and MAS said.

While crude oil prices have risen in recent months, global prices for most food commodities, as well as for intermediate and final manufactured goods, have continued to moderate.

The stronger Singapore dollar trade-weighted exchange rate should also further temper Singapore’s import cost pressures in the quarters ahead.

Domestically, overall inflation is likely to rise further in the coming months due to higher Certificates of Entitlement (COE) premiums. On Oct 18, the premium for Category B crossed the S$150,000 (US$109,500) mark for the first time, as premiums hit new highs for all car categories.

“Nonetheless, private transport inflation should slowly moderate over the course of next year alongside an expected increase in COE quotas,” MTI and MAS said. 

There will be more COEs available in the coming quarter from November this year to January 2024, with the overall quota going up by 13 per cent.

Accommodation inflation is also projected to ease as the supply of completed housing units increases.

“Upside risks remain, including from fresh shocks to global energy and food commodity prices due to geopolitical conflicts and adverse weather events, and more persistent-than-expected tightness in the domestic labour market,” said MTI and MAS.

“At the same time, there are also downside risks such as a sharper-than-projected slowdown in the global economy, which could induce a greater easing of cost and price pressures.”

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