Singapore’s headline CPI inflation eased further to 4.1% y/y (-0.2% m/m NSA) in Jul, from 4.5% y/y (0.5% m/m NSA) in Jun, coming off in line with our expectations (UOB est 4.1% y/y) but slightly missing market expectations (Bloomberg est 4.2%). Core inflation (which exclude private road transport and accommodation) also eased by a similar magnitude, coming in at 3.8% y/y (0.2% m/m) in Jul, from 4.2% y/y in Jun and exactly in line with Bloomberg’s median estimate, but slightly above ours (UOB est: 3.7%). This was the lowest y/y headline inflation print since Jan 2022 (4.0% y/y) and the lowest core inflation since Mar 2022 (3.6% y/y). 

Our Inflation Outlook – The moderation in the pace of headline and core inflation remained in line with our projections for the latest month. As such, we remain comfortable for our current forecasts; headline inflation to average 4.7% while core inflation to average 4.0% in 2023. Excluding the 2023 GST impact, we expect headline inflation to average 3.7% and core inflation to average 3.0% in 2023, both still above the “standard” 2% objective.