A housewife buying vegetables at a wet market in Singapore (R)
Roslan Rahman | AFP | Getty Images
Singapore’s inflation rate was lower than expected despite accelerating to its highest level in nearly two years in July as power prices rose due to higher energy prices caused by the Iran war.
Consumer prices rose 2.2% last month from a year earlier, the city reported, compared with a 2.3% rise expected by economists polled by Reuters and a 1.9% rise in June.
The consumer price index decreased by 0.2% from the previous month.
According to a joint announcement by the Monetary Authority of Singapore and the Ministry of Trade and Industry, soaring global energy prices have led to increases in Singapore’s electricity and gas prices, as well as transport fares.
“While global oil prices remain high and volatile, adverse weather conditions are expected to reduce agricultural yields and increase Singapore’s imported food prices,” the statement said, adding that prices for many more imported goods and services are expected to rise in the future.
MAS tightened monetary policy in a surprise move in July and last month warned that imported inflation was likely to rise in coming quarters due to rising input costs for fuel and electronics.
Core inflation, which excludes private transport and accommodation prices, rose to 2% from the expected 2.2%.
In response to the Iran war, Singapore had rolled out two support measures totaling approximately S$2 billion, including cash transfers, consumption vouchers for households, and tax refunds for businesses.
The inflation data comes as the city-state has significantly revised its full-year GDP forecast for 2026 upward, with growth now expected to be between 4.5% and 5.5%, more than double the lower end of the previous forecast of 2% to 4%.
