Singapore’s core inflation rate remained unchanged at 0.6% year-on-year in June, according to a report by Nomura Global Economics. This figure, consistent with May’s data, was below the anticipated 0.7%, primarily due to a modest increase in healthcare price inflation. The Monetary Authority of Singapore (MAS) is expected to adjust its 2025 core inflation forecast range to 0.5-1.0% from the previous 0.5-1.5%.
Headline inflation also remained stable at 0.8% year-on-year, aligning with Nomura’s forecast but falling short of the consensus prediction of 0.9%. Accommodation inflation saw a slight decrease to 1.0%, whilst private transport inflation increased to 2.0%, driven by rising car prices.
The report highlights that the subdued core inflation was influenced by a smaller rise in healthcare prices and a moderation in food price inflation. The MAS noted that higher retail and other goods inflation was offset by lower inflation in other major core categories. The diffusion index indicated a sequential decline in 38.6% of the core basket in June.
Despite global crude oil prices easing, the MAS expressed concerns over elevated uncertainties in the inflation outlook due to external risks. However, it maintained that food price increases should remain contained. The MAS’s Managing Director, Chia Der Jiun, recently stated that inflation is likely to stay “subdued” in the second half of the year.
Nomura maintains its 2025 core inflation forecast at 0.7%, slightly below the consensus of 0.8%, and expects a gradual increase in H2 due to base effects. The MAS is anticipated to narrow its core inflation forecast range in its upcoming Monetary Policy Statement on 30 July.
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