Singapore's core inflation in June dropped to 2.9 per cent year-on-year – the lowest in more than two years.

June's figure – a dip from May's 3.1 per cent – equalled the core inflation registered in March 2022.

The decrease was driven by lower inflation for retail and other goods, as well as services, according to data from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) on Tuesday (Jul 23).

On a month-on-month basis, core inflation – which excludes accommodation and private transport – was unchanged from May.

Overall or headline inflation in May was 2.4 per cent in June on a year-on-year basis, down from 3.1 per cent in the previous month.

"The slowdown was largely due to a decline in private transport costs, in addition to lower core inflation," MAS and MTI said.

On a month-on-month basis, headline inflation decreased by 0.2 per cent.

Private transport inflation fell from 2.8 per cent to -0.7 per cent in June as the prices of cars and motorcycles declined. Petrol prices also rose at a slower pace.

Retail and other goods inflation decreased to 0.5 per cent from 1.5 per cent in May because of the prices of medicines and health products and personal effects recording smaller increases, while the prices of clothing and footwear fell more steeply.

Services inflation dipped to 3.4 per cent in June from 3.6 per cent the month before, due to the "slower pace of increase in the cost of hospital services and holiday expenses.", said MAS and MTI.

Accommodation inflation also edged down as housing rents rose at a more modest pace, going from 3.4 per cent in May to 3.3 per cent in June.

Food inflation stayed at 2.8 per cent, reflecting stability in the inflation of food services, MAS and MTI said.

The authorities noted that the global prices of energy and most food commodities have remained relatively stable in recent months.

"The costs of Singapore's imported intermediate and final manufactured goods have also continued on a broad decline," MAS and MTI said.

"Inflation for services associated with overseas travel should moderate further over the course of the year as the air transport and hospitality sectors around the world restore supply."

The "gradually strengthening" Singdollar trade-weighted exchange rate should also continue to temper Singapore's imported inflation in the months ahead.

CNA