ANN/THE STRAITS TIMES – Core expenses of households in Singapore picked up in August as inflation in services rose, but overall inflation was still the lowest in over two years.
This leads some analysts to believe officials will hold steady on Singapore’s monetary policy in the October meeting and only move to loosen it in 2025.
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.
It was the first increase in core inflation since February, and comes after the indicator dropped to 2.5 per cent in July, the lowest level 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.
Maybank economist Brian Lee attributed most of the rise in August holiday expenses inflation to package tours.
“Strong travel appetite from Singaporeans may have contributed to this uptick, possibly with bookings ahead of the September and December school holidays,” he said.
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. This was the lowest reading since April 2021.
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.
