Singapore's core consumer price index (CPI) climbed 2.8% year on year in September, marking a slight increase from the 2.7% rate recorded in August, as reported by the Monetary Authority of Singapore (MAS) on Wednesday. This increase indicates a stabilization in the inflationary pressures affecting the city-state's economy.
On a month-on-month basis, the core CPI rose by 0.1% from August, further reflecting a cautious stability in consumer prices. The headline CPI, which encompasses volatile items such as food and energy, moderated to 2% year-on-year in September, a decrease from 2.2% in August. This decline was primarily driven by a reduction in transport prices, which fell by 2.4% owing to the affordability of automobiles and lower petrol costs.
However, it is essential to note that utility bills and service prices continued to rise, highlighting sector-specific inflation pressures that remain. The price increase of retail and other goods rose by 0.8% year on year in September, according to the MAS. The outlook, as shared in MAS's prepared statement, suggests a trend of cooling inflation.
Core inflation is expected to progressively moderate and stabilize around 2% by the end of 2024, with projections indicating an average range of 2.5% to 3.0% for 2024 as a whole, and a further decline to between 1.5% to 2.5% in 2025. Like many other jurisdictions, Singapore experienced accelerated inflation during, and in the aftermath of, the pandemic era.
Notably, Singapore's inflation peaked at 7.5% year on year in September of 2022 but has since eased steadily, suggesting a gradual recovery. Unlike many other central banks, the MAS does not maintain a strict inflation target. However, they have expressed that a core inflation rate modestly under 2% is preferable, reflecting their approach to monetary policy and economic stability..