Singapore’s Consumer Prices Show Resilience in September
In September, Singapore’s key consumer prices demonstrated a slight uptick, with core inflation rising for the second consecutive month, according to official data released on Oct 23.
Core Inflation Trends
- Core inflation, which excludes private transport and accommodation costs to provide a more accurate reflection of household expenses, increased to 2.8 per cent year on year.
- This exceeded economists’ expectations of 2.7 per cent and surpassed the rate of 2.7 per cent recorded in August.
- Although core inflation remains below the peak of 5.5 per cent in January 2023, the recent uptrend is a positive sign.
Overall Inflation Performance
- Overall or headline inflation dipped to 2 per cent year on year in September, down from 2.2 per cent in August.
- This decline was primarily driven by a sharper decrease in private transport costs, which helped offset the rise in core inflation.
- Despite the decrease, the headline figure surpassed economists’ forecast of 1.9 per cent.
Category Analysis
- Retail and other goods inflation increased to 0.8 per cent in September, up from 0.4 per cent in August, mainly due to a smaller decline in clothing and footwear prices.
- Services inflation remained steady at 3.3 per cent, with changes in telecommunications services fees balanced by increases in tuition and other fees, holiday expenses, and health insurance costs.
- Food inflation slightly decreased to 2.6 per cent, driven by a slower pace in food services price hikes.
- Private transport costs decreased by 2.4 per cent year on year in September, with larger declines in car prices and lower petrol costs contributing to this trend.
Month-on-Month Comparison
- In September, core inflation eased to 0.1 per cent on a month-on-month basis, while overall inflation slowed to 0.3 per cent.
- This contrasts with August’s figures, where core inflation was 0.3 per cent and overall inflation stood at 0.7 per cent.
Overall, Singapore’s consumer prices showcase a mix of trends, with core inflation on an upward trajectory and overall inflation displaying resilience amidst changing economic conditions.
Analysis
The rise in core inflation indicates a potential uptick in household expenses, which could impact consumers’ purchasing power and savings. It is crucial for individuals to monitor these trends and adjust their financial plans accordingly to navigate any potential challenges. Understanding the drivers behind inflation can help individuals make informed decisions about budgeting, investing, and saving for the future. By staying informed about economic indicators like inflation rates, individuals can better protect their financial well-being and plan for a more secure financial future.