SINGAPORE – Expenses of households in Singapore picked up in August as inflation in services rose.
Core inflation, which strips out private transport and accommodation costs to better reflect the expenses of households here, rose to 2.7 per cent year on year in August.
This was after it beat analysts’ expectations in July to cool to 2.5 per cent, which was the lowest in more than two years.
Of all spending categories, services inflation climbed the most to come in at 3.3 per cent in August, from 2.9 per cent in July. This came as holiday expenses picked up more strongly while airfares recorded smaller declines.
Year on year, overall or headline inflation dropped to 2.2 per cent in August from 2.4 per cent in July, driven by a fall in private transport prices.
However, the momentum in prices remain as on a month-on-month basis, core inflation rose 0.3 per cent, while overall inflation climbed 0.7 per cent.
Despite services inflation experiencing some volatility, due mainly to overseas travel costs, it remains on a moderating trend and should ease further over the rest of 2024, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) noted in their inflation report on Sept 23.
They added that the Singapore dollar’s gradually strengthening trade-weighted exchange rate should continue to temper imported inflation.
MAS and MTI kept unchanged their inflation forecasts for the year. For the whole of 2024, core inflation will average 2.5 per cent to 3.5 per cent, while overall inflation should range between 2 per cent and 3 per cent.
