Singapore experienced a significant rise in core inflation, reaching 3.3 percent year-on-year in October, according to the latest data released on Thursday (Nov 23). The Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) attributed this surge to increasing costs in various sectors, signaling a noticeable economic shift in the city-state.
Escalating Service and Retail Costs
The core inflation hike was primarily driven by rising prices in the service sector, retail, and other goods. This increase marks a substantial change from the 5.5 percent peak observed in January and February, the highest in 14 years, and the subsequent decline to 3 percent in September, the lowest since March 2022. Notably, core inflation calculations exclude accommodation and private transport expenses.
Overall Inflation Also on the Rise
Alongside core inflation, Singapore’s overall inflation rate also escalated, reaching 4.7 percent year-on-year in October, a noticeable jump from 4.1 percent in the preceding month. This overall inflation rate increase can be attributed mainly to heightened private transport inflation, combined with the aforementioned rise in core inflation.
Electricity and Gas Prices Contribute to Inflation
A significant factor in the October inflation rates was the rise in electricity and gas costs. These increases have contributed to the overall inflationary pressure, affecting various sectors of the economy and, by extension, the general cost of living in Singapore.
Economic Implications
This uptick in inflation rates is a critical indicator of the economic landscape in Singapore, reflecting the broader trends in the global market, especially in the post-pandemic recovery phase. As the city-state navigates these inflationary challenges, the focus will likely be on balancing economic growth with maintaining the affordability of essential services and goods for its residents.
Looking Ahead
The MAS and MTI are closely monitoring these developments, with an emphasis on mitigating the impact on the general population. The authorities are expected to implement measures to manage the inflationary trend while supporting sustainable economic growth. As Singapore continues to adapt to the changing global economic conditions, the response to these inflationary pressures will be crucial in shaping the country’s economic trajectory in the coming months.
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