Singapore inflation hits highest in nearly two years, but undershoots expectations

Singapore inflation missed estimates even as it accelerated to a near two-year high in July, as higher energy prices due to the Iran war lifted electricity prices.

The city-state reported that consumer prices rose 2.2% last month, year on year, compared with the 2.3% expected by economists polled by Reuters, and the 1.9% rise seen in June. Consumer price index fell 0.2% on a month-on-month basis.

The Monetary Authority of Singapore had tightened its monetary policy in a surprise move in July, warning last month that imported inflation was likely to rise in the coming quarters due to higher fuel and electronic input costs.

Core inflation, which strips out prices of private transport and accommodation, rose to 2% compared to the 2.2% forecast.

Singapore had rolled out two support packages for the country in response to the Iran war, totaling about 2 billion Singapore dollars, with cash handouts, consumption vouchers for households, and tax rebates for companies.

The inflation data also comes as the city-state upgraded its GDP forecast sharply for the full year 2026, with growth now expected to come in at 4.5% to 5.5%, more than double the lower-end of its previous forecast of 2%-4%.

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