In June, Singapore recorded a headline consumer price index that rose by 2.4% year-on-year, a notable decrease from the 2.9% increase observed in May, marking the lowest inflation rate the city-state has experienced since August 2021. This information was disclosed by the Monetary Authority of Singapore alongside the Ministry of Trade and Industry on Tuesday. The report highlighted a slight decline in headline prices, which fell by 0.2% in June compared to May.
Moreover, Singapore's core inflation, which excludes private transport and accommodation costs, showed a year-on-year increase of 2.9% in June, a decrease from the 3.1% growth seen in the previous three months. Like many countries in the region, Singapore faced significant inflationary pressures during and in the aftermath of the global pandemic.
In the years preceding 2021, the city-state maintained very low inflation rates, often teetering on the edge of deflation. The inflationary trend began to ascend steadily mid-2021, peaking at 7.5% year-on-year in August and September of 2022. Since that peak, the rate has consistently decreased and is currently situated within a sub-3% range. Despite this overall decline, essential costs continue to impact Singaporeans, with food prices increasing by 2.8% and healthcare costs rising by 3.7% year-on-year as per official statistics. In its statements, the Monetary Authority of Singapore projected a moderate inflationary environment for the entirety of 2024.
This projection comes especially in consideration of the recent 1% boost in the goods and services tax, which the authority will factor out of their computations. The central bank anticipates that for 2024, core inflation is expected to average between 2.5% and 3.5%. However, when excluding the transient effects of the increased goods and services tax, core inflation is predicted to fall between 1.5% and 2.5%.
Although there is no explicit inflation target stated by the Monetary Authority, it generally aims for an inflation rate of just under 2% per annum as a benchmark for price stability..