Singapore Core Inflation Accelerates to 1.6% As Oil Risks Linger

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(Bloomberg) — Singapore’s core inflation accelerated last month as higher global energy costs are beginning to filter through to consumer prices.

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Core inflation, which excludes housing and private transportation costs, rose to 1.6% in June from a year earlier, according to a statement by the Singapore Department of Statistics on Wednesday. That was faster than the 1.4% pace in May but below the median estimate in a Bloomberg News survey of 1.7%.

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The all-items inflation rate came in at 1.9%, compared to the 2% survey median estimate.

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Food inflation accelerated to 2.1% last month, while larger increases in airfare and holiday expenses pushed services inflation to 1.5%. Transport inflation was up at 7.5%. Electricity and gas prices fell at a slower pace.

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“Global energy prices remain elevated relative to their levels in 2025,” the Monetary Authority of Singapore and the Ministry of Trade and Industry said in a statement.

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“As higher energy costs pass through global supply chains with a lag, they are expected to raise production and transport costs for a wider range of Singapore’s imported goods and services over time.”

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The stronger reading suggests recent spikes in global energy prices and transport costs are starting to feed through, potentially adding pressure on the MAS to further tighten policy at its Monday meeting. 

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The MAS in April tightened its settings and projected the city-state’s core inflation at 1.5%-2.5% this year, up from the previous range of 1%-2%, as higher prices could erode real incomes and crimp demand over the next few quarters.

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The MAS and MTI reiterated that there are upside risks to the inflation outlook if a slower-than-expected resumption in energy shipments raises input costs for Singapore. But tighter global financial conditions and a slowdown in economic activity could also dampen price pressures.

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Earlier this week, Singapore’s representatives at the International Monetary Fund said core inflation is expected to average 2.5% in the second half of the year. 

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Price pressures could build as households began paying a record 17% increase in electricity rates in the third quarter, as utilities passed on higher fuel costs.

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The global backdrop remains fluid. Energy prices in June had retreated from the highs seen earlier in the Iran war, but Brent oil prices recently rebounded above $90 per barrel this month as tensions reignited.

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Singapore’s economy has remained resilient through the conflict, expanding 5.7% in the second quarter from a year earlier, beating the 5.5% estimate in a Bloomberg News survey on global demand for artificial intelligence-related electronics.

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—With assistance from Srinidhi Ragavendran.

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