Electricity and gas inflation rose from 1.3 per cent to 5.3 per cent on account of larger increases in electricity and gas tariffs.
Food inflation fell from 3.7 per cent in December to 3.3 per cent in January as the prices of cooked and non-cooked food rose at a more gradual pace.
Services inflation eased from 3.9 per cent to 3.3 per cent on the back of a smaller increase in holiday expenses and a larger decline in airfares.
“Inflation for services associated with overseas leisure travel should continue moderating over the course of this year as supply conditions in international hospitality industries improve,” said MAS and MTI.
“These factors, alongside the stronger S$ trade-weighted exchange rate, should continue to temper Singapore’s imported inflation in the quarters ahead.”
Although increases in unit labour costs have slowed in tandem with the cooling labour market, authorities noted that businesses are, nonetheless, still likely to continue passing higher labour and other business costs to consumer prices at a gradual pace.
MAS and MTI maintained their projection for 2024 as a whole, expecting both headline and core inflation to average 2.5 per cent to 3.5 per cent.
Excluding the transitory effects of the GST increase, headline and core inflation are expected to come in at 1.5 per cent to 2.5 per cent.
“Upside risks to inflation remain, including from fresh shocks to global energy and shipping costs due to geopolitical conflicts, higher food commodity prices from adverse weather events, as well as more persistent-than-expected tightness in the domestic labour market,” said MAS and MTI.
“Conversely, an unexpected weakening in the global economy could induce a faster easing of cost and price pressures.”
To help with cost-of-living concerns, Deputy Prime Minister Lawrence Wong announced during his Budget speech earlier this month that Singaporeans will get payouts such as an additional S$600 in CDC vouchers.
The government will also top up the fund for GST vouchers by S$6 billion (US$4.5 billion), to continue defraying GST expenses for lower- and middle-income households.
Although inflation started to moderate in 2023, economic growth slowed and real incomes declined as a result, noted Mr Wong, who is also Finance Minister.
He added that while the government expects the situation to improve in 2024, it is doing more to support households as uncertainties remain in the economic outlook.
