Understanding Inflation in Singapore
Inflation represents the rate at which prices fluctuate over time for a consistent selection of goods and services.
Similar to many nations, Singapore’s government tracks both headline and core inflation. The former pertains to the movement of the Consumer Price Index (CPI), encompassing items commonly purchased by the majority of Singaporean households.
In Singapore, core inflation – a subset of the complete CPI – excludes costs related to private road transport and accommodation.
The Monetary Authority of Singapore (MAS) emphasizes core inflation as a more accurate gauge of the “underlying price pressures” in the economy. The central bank closely observes this measure to identify significant trends in the pricing of goods and services.
How Does Singapore Evaluate the Cost of Living? Components of the CPI Include:
- Housing and utilities
- Clothing and footwear
- Household durables (such as appliances)
- Recreation and Culture
- Miscellaneous goods and services
To compile the CPI, Singapore’s Department of Statistics considers prices from approximately 6,800 brands and varieties available at 4,200 outlets. Not all price fluctuations impact the CPI equally; instead, each category of items is assigned specific weights based on their importance in the average household’s expenditure patterns.