Singapore's core inflation hits two-year high of 2.2% as services, food, and retail costs rise

The rise points to continued pressure on household budgets, as higher inflation across services, retail & other goods and food "more than offset" lower private transport inflation.

Singapore’s core inflation rose to 2.2% in August 2026 – up from 2% in July, reaching its highest level in about two years.

Announced by the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on 23 September, the rise was attributed to higher price pressures across services, food and retail goods.

Core inflation, which excludes accommodation and private transport costs, is closely watched by MAS an indicator of underlying price pressures in the economy. On a month-on-month basis, core prices increased by 0.3% in August.

The main drivers were higher costs for services, retail & other goods, and food. Services inflation accelerated as airfares and point-to-point transport services became more expensive.

The price of retail goods also rose at a faster pace, led by clothing and footwear as well as personal-care products.

Food inflation edged higher, reflecting an increase in food-services costs, although inflation for non-cooked food moderated.

Headline inflation, measured by the Consumer Price Index (CPI) for all items, also ticked up to 2.3% year-on-year in August, from 2.2% in July. The rise in core inflation more than offset a slowdown in private transport inflation, where car prices increased by less than they had previously.

Meanwhile, accommodation inflation was unchanged, with housing rents rising at the same pace as in July. Electricity and gas inflation was also steady.

Looking ahead, MAS and MTI said inflationary pressures could remain elevated. Higher and volatile global energy prices are feeding through to electricity, gas, and transport costs, while adverse weather conditions may push up imported food prices. Broader cost pressures could also lift prices for imported goods and services in the coming quarters.

Both core and headline inflation are projected to average between 1.5% and 2.5% for the full year. Core inflation is expected to remain elevated into 2027 before moderating more clearly from around the middle of that year, alongside an anticipated easing in global energy prices.

The authorities noted that risks remain tilted to the upside, including possible disruptions to energy supplies and more severe weather-related pressure on food prices. However, weaker global growth or a pullback in investment linked to artificial intelligence could ease inflationary pressures.

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Lead image / MAS