Inflation drops in July

Latest reading: Inflation fell to 0.6% in July from June’s 0.8%. July's figure represented the lowest inflation rate since January 2021. Looking at the details of the release, costs for housing and utilities dropped, and healthcare price pressures eased. In contrast, food and transportation costs rose at a marginally stronger pace. Annual average inflation edged down to 1.2% in July (June: 1.3%). Meanwhile, core inflation edged down to 0.5% in July from June’s 0.6%. Finally, consumer prices dropped 0.45% in July over the previous month, which was below the 0.08% fall logged in June. July's result marked the weakest reading since January.

Panelist insight: Commenting on the outlook, Nomura’s Euben Paracuelles and Charnon Boonnuch stated: “We think the inflation outlook remains benign, owing to muted underlying price pressures and still-broad sources of disinflation as discussed above. This is also consistent with near-neutral labour market conditions. We also maintain our 2025 headline inflation forecast […] near the lower bound of the MAS’ forecast range of 0.5-1.5%.”

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