Singapore’s headline inflation accelerated to 2.2% year on year in July, reaching its highest level in nearly two years but falling short of economist expectations.
Analysts polled by Reuters had forecast a reading of 2.3%, while June had recorded a more modest 1.9% rise in consumer prices.
On a month-on-month basis, the consumer price index edged down by 0.2%, tempering the overall picture of rising price pressures in the city-state.
Higher global energy prices driven by the Iran war have fed directly into Singapore’s electricity and gas charges, as well as pushing up transportation fares across the country.
A joint release by the Monetary Authority of Singapore and the Ministry of Trade and Industry pointed to elevated global oil prices as a key driver of the inflationary pressure.
“Global oil prices remain high and volatile while adverse weather conditions are expected to lower agricultural yields and raise Singapore’s imported food prices,” the statement said, adding that prices of more imported goods and services are expected to climb moving forward.
Core inflation, which strips out the costs of private transport and accommodation, rose to 2%, also coming in below the 2.2% that economists had anticipated.
The MAS had already moved to tighten monetary policy in a surprise decision in July, warning at the time that imported inflation was likely to rise in coming quarters due to higher fuel and electronic input costs.
In response to the economic pressures stemming from the Iran war, Singapore rolled out two support packages totalling approximately 2 billion Singapore dollars, including cash handouts, consumption vouchers for households, and tax rebates for companies.
The inflation data arrives against a backdrop of strong economic momentum, with Singapore having sharply upgraded its full-year 2026 GDP growth forecast to between 4.5% and 5.5%.
That upgraded range is more than double the lower end of the country’s previous forecast, which had projected growth of between 2% and 4% for the year.
The combination of rising imported costs and robust economic growth places the MAS in a delicate position as it weighs further monetary policy decisions in the months ahead.