Singapore: Inflation comes in at highest level since November 2013 in July
August 23, 2021
Consumer prices declined 0.19% in July over the previous month, a sharper drop than the 0.01% slide recorded in June. July's result marked the sharpest fall in prices since October 2020 and was largely attributed to declining prices for housing and utilities.
Inflation came in at 2.5% in July, up from June’s 2.4%. July's result marked the highest inflation rate since November 2013. Accordingly, annual average inflation rose to 0.9% in July (June: 0.7%). Lastly, core inflation accelerated to 1.0% in July, from June’s 0.6% increase.
Commenting on the outlook for inflation, Barnabas Gan, economist at United Overseas Bank, noted:
“We keep to our headline and core inflation outlook of 1.4% and 1.0% for 2021, respectively. However, we recognise some upside risk to our full-year headline inflation given Singapore’s overall positive domestic economic prognosis and elevated external inflation pressures. […] On the flip side, increased Covid-19-led risks suggest the persistence of negative output gaps seen in some of Singapore’s key trading partners, which will likely cap import prices pressures.”
Author: Stephen Vogado, Economist