Singapore core inflation rises to 3.3% in October

Increase ends five-month streak of core consumer prices increasing at slower pace

- Prisca Ang

Core consumer prices in Singapore picked up in October after rising at a slower pace for several months, owing to higher inflation for services and retail goods and an increase in electricity and gas costs.

Consumers can expect more volatility in overall inflation in the coming months amid swings in certificate of entitlement (COE) premiums and global oil prices, although prices are expected to moderate in 2024.

Official data on Nov 23 showed that core inflation, which excludes private transport and accommodation costs to better reflect the expenses of Singapore households, stood at 3.3 per cent year on year in October.

This was higher than the 3 per cent seen in September, and the 3.1 per cent median estimate from economists polled by Bloomberg.

The increase in core inflation broke a five-month-long streak of core consumer prices rising at a slower pace.

DBS economist Chua Han Teng said the increase in October marked the first uptick since January 2023, when core inflation rose to 5.5 per cent, from 5.1 per cent in December. The increase stemmed from the 1 percentage point goods and services tax (GST) hike to 8 per cent.

Core inflation dropped to 5 per cent in March and was unchanged in April, before decreasing further.

“While inflation has been moderating over the course of 2023, October’s uptick kept price increases high versus the pre-pandemic average,” said Mr Chua.

Meanwhile, overall or headline inflation edged up to 4.7 per cent year on year in October, from 4.1 per cent in September.

This reflected higher private transport inflation as car prices rose at a faster pace, as well as the rise in core inflation, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI).