Singapore's core inflation rises to 2% in July on higher electricity and gas, services and food prices

SINGAPORE, 24 AUGUST 2026 —

Singapore’s Core Inflation Hits 2% in July as Energy and Food Costs Rise

The increase, though slightly below market expectations, signals broader price pressures as global supply chains absorb rising input costs. Core inflation, which excludes accommodation and private transport, rose 0.3% month-on-month in July.

Overall inflation, measured by the Consumer Price Index-All Items, climbed to 2.2% in July from 1.9% in June, driven by higher accommodation costs alongside core inflation. This was marginally below the 2.3% forecast in a Reuters poll. On a month-on-month basis, overall inflation fell 0.2% in July.

Electricity and Gas Prices Surge

Electricity and gas inflation reversed a June decline of 2.9%, jumping to 8.7% in July due to a sharp rise in electricity tariffs, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said in a joint statement.

Services inflation also accelerated, reaching 1.7% in July from 1.5% in June, as airfares and point-to-point transport services rose faster. Food inflation edged up to 2.2% from 2.1% in June, reflecting higher prices for food services and non-cooked food.

Accommodation inflation picked up to 0.8% from 0.6% in June, driven by larger increases in housing rents and maintenance fees. Meanwhile, private transport inflation slowed slightly, easing from 8.4% in June to 8% in July as petrol and diesel price increases moderated.

Global Factors Drive Price Pressures

Authorities attributed the rise in electricity and gas prices to elevated global energy costs, while volatile oil prices and adverse weather conditions are expected to reduce agricultural yields and lift Singapore’s imported food prices.

“As higher input costs pass through global supply chains, the prices of a wider range of Singapore’s imported goods and services are expected to pick up in the quarters ahead,” MAS and MTI said.

Domestic unit labour costs in the services sector are projected to rise at a slower pace due to sustained productivity growth and moderating nominal wage growth. Government subsidies are also expected to continue dampening services inflation.

Inflation Outlook Remains Elevated

For 2026, core and overall inflation are projected to average between 1.5% and 2.5%, aligning with MAS’ full-year forecast range. Core inflation is expected to stay elevated into 2027 before easing more noticeably in the middle of the year, alongside a projected decline in global energy prices.

“At this juncture, the risks to the inflation outlook remain tilted to the upside,” MAS and MTI said. “Renewed disruptions in global energy supplies or worse-than-expected weather conditions could raise Singapore’s imported costs by more than anticipated.”

They also warned that persistent inflation could occur if strong IT investment growth fuels stronger demand globally and in Singapore. However, downside risks remain, including tighter global financial conditions or a pullback in AI-related investment, which could slow economic activity and reduce inflation.

Regional Implications for Malaysia

Singapore’s inflation trends carry implications for Malaysia, given the two economies’ close trade and supply chain linkages. Higher electricity and food prices in Singapore could signal similar pressures in Malaysia, particularly in imported goods and energy-related costs.

Malaysia’s own inflation dynamics may also be influenced by regional energy price movements, given its reliance on imported fuel and food commodities. Policymakers in both countries will likely monitor these trends closely to assess potential spillover effects.

Stakeholder Perspectives

Industry analysts suggest that while Singapore’s inflation remains within manageable levels, the persistence of elevated energy and food prices warrants caution. Businesses in sectors such as food services and transportation may face continued cost pressures, potentially leading to adjustments in pricing strategies.

Consumers, meanwhile, could see broader price increases in the coming quarters as higher input costs work their way through supply chains. The impact may vary across sectors, with services and food prices likely to remain key drivers of inflation.

Forward-Looking Assessment

Looking ahead, the trajectory of Singapore’s inflation will depend heavily on global energy markets and weather conditions. If energy prices remain elevated or supply disruptions occur, inflation could stay higher for longer than currently projected.

Conversely, a moderation in global oil prices or improved agricultural yields could ease inflationary pressures. Policymakers will need to balance these risks while supporting economic growth amid a potentially shifting inflation landscape.

For now, Singapore’s inflation remains within the central bank’s forecast range, but the balance of risks suggests vigilance will be necessary in the months ahead.

Related: Monetary Authority of Singapore · Singapore