S’pore core inflation near 14-year high of 5.1% in August on more costly food, services

SINGAPORE – Consumer prices in Singapore continued to climb in August and core inflation hit a near 14-year high, on the back of more costly services and food.

Core inflation, which excludes costs of private transport and accommodation and reflects the expenses of Singaporean households more accurately, hit 5.1 per cent year on year, up from 4.8 per cent in July. This marks its highest level since it touched 5.5 per cent in November 2008.

The August figure was above the Bloomberg poll of 5 per cent rise.

Also up is headline consumer price index or overall inflation for August.

It came in at 7.5 per cent, matching the 14-year high in June 2008. In July, it was 7 per cent. The increase mainly reflected higher transport inflation, besides the pickup in core inflation.

The August headline inflation was higher than Bloomberg’s estimates of 7.2 per cent in July.

For the full year, the headline inflation forecast remains unchanged at between 5 per cent and 6 per cent, while core inflation is projected to average between 3 per cent and 4 per cent, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on Friday.

Their data showed that private transport costs had the biggest increase to 24.1 per cent in August from 22.2 per cent in July. This was due to a faster pace of increase in car prices.

Food inflation came in at 6.4 per cent in August, up from 6.1 per cent the previous month, lifted by steeper rises for food services and non-cooked food.

Services inflation crept up to 3.8 per cent mainly because of a stronger pickup in holiday expenses.

Both accommodation inflation and costs of retail and other goods edged up slightly to 4.7 per cent and 2.9 per cent, respectively.

Electricity and gas inflation was the only category that bucked the trend to ease to 23.9 per cent in August from 24 per cent last month due to a smaller rise in gas prices.

Both MAS and MTI said inflationary pressures will remain elevated in the months ahead.