Singapore inflation hits highest in nearly two years, but undershoots expectations

A housewife buys vegetables at a wet market in Singapore. Singapore inflation missed estimates even as it accelerated to a near two-year high in July, driven by higher energy prices due to the Iran war. Consumer prices rose 2.2% year on year, compared with the 2.3% expected by economists polled by Reuters, and the 1.9% rise seen in June. The consumer price index fell 0.2% on a month-on-month basis. The Monetary Authority of Singapore tightened its monetary policy in a surprise move in July, warning that imported inflation was likely to rise due to higher fuel and electronic input costs. Core inflation, which strips out prices of private transport and accommodation, rose to 2%, compared to the 2.2% forecast. Singapore rolled out two support packages totaling about 2 billion Singapore dollars, including cash handouts, consumption vouchers for households, and tax rebates for companies. The inflation data also comes as Singapore upgraded its GDP forecast sharply for the full year 2026, with growth now expected to come in at 4.5% to 5.5%, more than double the lower-end of its previous forecast of 2%-4%.