Singapore inflation hits highest in nearly two years, but undershoots expectations

Key Points:

• Singapore's inflation rate rose to 2.2% year-on-year in July, nearing a two-year high but slightly below the 2.3% forecast by economists, with a 0.2% month-on-month decline in the consumer price index.
• Higher global energy prices, driven by the Iran war, increased electricity, gas charges, and transportation fares, contributing to the inflationary pressure.
• The Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry noted that ongoing high oil prices and adverse weather conditions are expected to push up imported food and goods prices further.
• Core inflation, excluding private transport and accommodation, increased to 2%, slightly under the 2.2% forecast, amid tightening monetary policy by MAS in July to combat rising imported inflation.
• In response to inflation pressures linked to the Iran war, Singapore introduced support packages worth about 2 billion SGD, including cash handouts, consumption vouchers, and tax rebates to assist households and businesses.