Singapore’s core inflation reached a new high of 5.1% in August 2022, this is the highest since November 2008. The MAS Core Inflation excludes accommodation and private transport. Headline inflation (or the CPI-All Items) reached 7.5%.
Across most categories, prices have increased across the board, including communications which bucked the trend last month. Only miscellaneous goods and services showed a slight decline.
Despite the easing in global supply chain snarls and commodity prices stabilising, MAS expects global inflation to stay elevated. Imported inflation is likely to continue in the near term. For the full year, MAS expects CPI-All Items inflation to come in at 5.0 to 6.0%, and MAS Core Inflation at 3.0 to 4.0%.
With this outlook, we can expect prices to continue rising but which are the categories that are increasing the most?
Private Transport Increased By 24.1% Year-on-Year (Y-o-Y)
With each round of COE prices making new records, it is not surprising that private transport prices have increased the most. Compared to August last year, this year’s private transport prices have jumped 24.1%, almost a quarter more expensive than before.
Even those of us who don’t drive private vehicles are not spared the price increases. Public transport prices have increased 7.8% compared to last year. While other transport services increased by 13.2% during the same period.
All these make Transport the category that seen the steepest increase at 20.2%, y-o-y.
Housing Utilities Increased By 16.2% (Y-o-Y)
You are probably not imagining things if you think that your electricity bill looks more expensive than ever, especially if you are not on a fixed price plan from one of the open market electricity retailers.
Housing utilities and other fuels (which includes household electricity) has increased 16.2% compared to August last year.
Meanwhile, housing accommodation has increased 4.7% in the same period, bringing Housing & Utilities to an overall increase of 6.0%
Thankfully, electricity tariffs will be lower for the October to December 2022 after six consecutive quarters of increase. Hopefully, we will see the peak of utilities prices soon as electricity tariffs ease.
Meat Increased By 13% (Y-o-Y)
Eating meat would cost you more now (more reason to consider eating more vegetables). Meat prices has increased 13% compared to August last year. In particular, prices for chilled whole chicken and chilled chicken wings have increased 35.4% and 38.3%, respectively.
While Singapore has diversified our meat sources after the export ban on chicken from Malaysia, it takes time for supply chains to be established. Malaysia has also announced the lifting of the export ban, albeit with caveats. This resumption will also help restore the supply of chicken to Singapore and hopefully stabilise prices.
Overall, food prices have increased by 6.4% compared to August last year. Eating out or takeaways would cost you more as food serving services have increased by 6.5%. Even if you cook at home, food prices have also increased by 6.3%.
Footwear Increased by 10.4% (Y-o-Y)
Maybe despite all the frequent sales, you still feel like you are spending more on shopping? You may not be wrong because Clothing and Footwear has increased by 8.8% compared to August last year.
Footwear has increased the most by 10.4% while Clothing has increased by 8.8%. Other articles and related services only marginally increased by 1.3%
Holiday Expenses Increased by 8.1% (Y-o-Y)
August heralded the reopening of Singapore’s borders and the return of travelling for many Singaporeans. This was reflected in the higher holiday expenses which increased 8.1% compared to August 2021. While August 2021 may not be a fair base to compare to as we were still in Heightened Alert, holiday expenses in August 2022 are more expensive than before the pandemic, 7.1% more when compared to August 2019.
Recreational and cultural services have also become more expensive, increasing by 5.1%. This brings Recreation and Culture to an overall increase of 5.9%.
Postage And Courier Services Increased By 7.2%
Frequent online shoppers would have already realised this when they have to pay for shipping which was previously free or low cost. Prices for postage and courier services increased by 7.2% compared to last year.
This was the most significant increase under the Communication category which also includes telecommunication equipment (increase of 2.6%) and telecommunication services (decrease of 1.3%). Overall, the communication category declined by 1.1%, year-on-year.
CPI-All-Items Increased by 7.5%
Overall, prices of all items increased by 7.5%. If we exclude accommodation, inflation actually increased to 8.2% compared to last August. MAS expects the labour market to remain tight and wage growth to remain strong. Given the firm consumer spending, businesses are also likely to pass on increases in labour costs and the prices of fuel, utilities and other imported inputs to consumer prices. This, in conjunction with imported inflation, will keep inflation going.
While inflation is expected to remain elevated, there are some areas where things are less expensive (i.e. telco plans), and areas where prices appear to have peaked (i.e. electricity).
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