Key facts
- Singapore's core inflation accelerated to 1.6% year-on-year in June, up from 1.4% in May.
- Overall inflation rose to 1.9% in June from 1.8% in May.
- Increases in food, services, and retail goods inflation drove the core inflation pickup.
- Higher global energy prices are expected to impact electricity tariffs and imported goods over time.
- In May, core inflation remained steady at 1.4% despite rising energy prices.
Singapore's core inflation accelerated to 1.6% year-on-year in June, an increase from 1.4% in May, as higher global energy costs begin to impact consumer prices. The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) reported that the rise was driven by higher inflation in food, services, and retail goods.
On a month-on-month basis, core prices, which exclude accommodation and private transport, rose by 0.1% in June. Overall inflation, measured by the Consumer Price Index-All Items, also increased to 1.9% in June from 1.8% in May, primarily due to higher accommodation inflation and the pickup in core inflation. Overall inflation was unchanged month-on-month.
Specific sector data showed food inflation climbing to 2.1% in June from 1.8% in May, with faster price increases for both non-cooked food and food services. Services inflation edged up to 1.5% from 1.3%, attributed to larger increases in airfares and holiday expenses during the June school holidays. Accommodation inflation saw a slight increase to 0.6% from 0.5% due to rising housing rents, while retail and other goods inflation moved up to 1.7% from 1.6%.
Conversely, private transport inflation saw a slight decrease to 8.4% in June from 8.6% in May, attributed to a smaller increase in petrol prices. Electricity and gas prices also fell at a slower pace, declining by 2.9% in June compared to 3% in May. MAS and MTI noted that the regulated electricity tariff, which is set based on average natural gas prices from the preceding quarter, will reflect higher global energy prices from April to mid-June starting in the third quarter of 2026.
Looking ahead, MAS and MTI indicated that global energy prices remain elevated and are expected to increase production and transport costs for imported goods and services over time. However, domestic services unit labor costs are projected to rise at a slower pace this year as nominal wage growth eases. In a previous report from June, core inflation had remained steady at 1.4% in May, suggesting Singapore was relatively insulated from an oil crunch at that time. MAS had tightened policy in April and raised its core inflation forecast for the year to 1.5%-2.5%.