Singapore’s core inflation eases to 2% in September

SINGAPORE – Singapore’s overall inflation dropped in September, due to lower core inflation and private transport inflation.

Core inflation – which excludes private transport and accommodation to better reflect household expenses – eased to 2%, down from 2.2% in August, according to data from the Singapore Department of Statistics on Oct 23.

Overall inflation fell to 2.2% in September from 2.3% in the previous month owing to lower inflation in services, retail and other goods, and private transport.

DBS senior economist Chua Han Teng wrote in an Oct 23 note that the data for September suggests “initial fears of a significant acceleration in inflationary pressures have not really played out”.

Referring to the Monetary Authority of Singapore’s Oct 14 decisions to narrow its 2026 inflation forecast ranges and leave its exchange rate-based monetary policy unchanged, Chua said the authorities expect underlying price pressures to remain slightly elevated in the immediate future, before moderating discernibly from mid-2027.

“This suggests that policymakers see core inflation as nearing its cyclical peak, as imported cost pressures and commodity supply disruptions ease in the second half of 2027 alongside muted domestically driven price pressures,” he wrote.

Private transport inflation slowed to 7.1%, down from 7.5% in August and 8% in July, due to a more gradual increase in car prices.

Meanwhile, accommodation inflation went up to 0.9% in September from August’s 0.8% as housing rents increased at a faster pace.

Services inflation dropped to 1.7%, from 2% in August, due to a smaller increase in point-to-point transport service costs and a larger decline in telecommunication service prices.

Retail and other goods’ inflation dropped to 1.2% in September from the previous month’s 1.8%, as furniture prices declined and clothing prices rose at a slower pace.

Food inflation increased slightly to 2.4%, from 2.3% in August and from 2.2% in July, due to higher inflation in both non-cooked food and food services.

Electricity and gas prices’ inflation remained unchanged at 8.7% for September, as electricity prices rose at a similar pace as in August.

Zavier Wong, market analyst at trading and investing platform eToro, said the cooling of goods and services’ inflation can be read two ways: “Either businesses have little room left to raise prices, or shoppers are pushing back on higher prices.”

Wong said it is likely the latter, as the 17% jump in electricity tariffs from July left households with less to spend in shops, and retail trade was the one part of its sector group that did not expand in the third quarter of 2026.

“Furniture prices fell in September, and clothing prices rose more slowly. The oil shock has inevitably pushed up retailers’ costs, and shoppers holding back simply add to the strain,” said Wong.

“It’s a double whammy for margins we’re seeing, and with Brent now back above US$110, the pressure to raise prices is only going to build from here.”

Maybank Investment Banking Group economist Brian Lee said cost pressures remain acute for businesses, as rising global energy and food prices add to near-term imported inflation.

Firms may continue passing on operating cost increases, he said, although price increases are likely to remain restrained due to subdued consumer demand amid a cooling labour market.

Lee added: “Core inflation may thus be near its peak and could level off and cool slightly in 2027, barring further escalation in global commodity prices.”