Singapore’s Consumer Price Index, which measures purchasing power and inflation rate, rose at the fastest pace in the last 4 years in July 2018.
Core CPI rose 1.9 percent in July this year from a year earlier, with electricity and gas costs driving the price increases
The cost of electricity and gas surged 12.7 per cent in July from the year earlier.
Said the Monetary Authority of Singapore and Ministry of Trade and Industry in a press release:
“This reflects an upward revision in electricity tariffs in July following the pickup in global oil prices in the preceding quarter.”
The MAS and MTI cautioned Singaporeans to expect core inflation to rise gradually over the remaining months to average in the upper half of the 1 to 2 per cent forecast range.
Similarly, headline inflation is projected to come within the upper half of the 0 to 1 per cent forecast range for the full year.
Imported inflation is expected to rise due in part to the rally in global oil prices as well as an expected increase in global food commodity prices.
Commenting on the matter, UOB economist Francis Tan said:
“Cost-push type of inflation – rather than a demand-pull type of inflation – due to higher international oil prices will only mean lower purchasing power for Singaporeans.”
Domestic sources of inflation are also expected to increase alongside a faster pace of wage growth and a pickup in domestic demand.