Singapore’s Core Inflation Rises to 3.6% in May: How Will This Affect You?

Emma Lam
Last updated Jun 24, 2022

Singapore’s year-on-year core inflation rate continues to trend upwards, rising from 3.3% in April to 3.6% in May 2022. This figure is projected to exceed 4% come June; so how will this all-time high core inflation affect you?

As we approach the midpoint of 2022, core inflation is at an all-time high in a decade since 2012. As a compounded consequence of the COVID-19 pandemic and the Russian-Ukraine War, economies are under immense stress as governments attempt to cope with soaring prices.

In Singapore’s case, core inflation has further spiked from the previous 10-year high of 3.3% in April to 3.6% in May on a year-on-year basis. The only other time Singapore reported a higher year-on-year growth was in December 2008 when core inflation hit 4.2%.

Worse still, bank economists note that core inflation is estimated to exceed the 4% threshold come June next month.

Meanwhile, the headline consumer price index, or overall inflation, continues to persist at a year-on-year high of 5.6% this year.

This exceeds the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry’s (MTI) current forecast of consumer price inflation to hover around 4.5 to 5.5% in 2022.

At this juncture, the challenges of tackling inflation are indeed daunting. Even Prime Minister Lee Hsien Loong commented that “drastic measures” are needed to curb high inflation and “prevent inflationary expectations from taking root”. 

A failure to control these pressures may risk a recession.

So amid all this economic pandemonium, how will current inflation trends affect you?

Table of contents

Disclaimer: Information is updated as of 24 June 2022.

Core inflation vs. Overall inflation

Source: MAS, MTI; adapted from Straits Times

Before delving further, let’s distinguish between core and overall inflation.

Typically in most countries, core inflation is an index that excludes the prices of volatile goods and items like food and energy. 

However, in MAS’ definition, core inflation in Singapore pertains to retail, food and energy (electricity and gas) costs. Only accommodation and private transport costs are excluded due to their volatility and influence from supply-side administrative policies.

On the other hand, overall inflation in Singapore is measured by the headline consumer price index (CPI). This measures the cost of a fixed basket of goods and services used by resident households daily.

The composition and categorical weightage of goods and services in this index is determined once every five years through average household consumption patterns.

Considering these differences, the 3.6% year-on-year core inflation has undoubtedly led to significant impacts on Singapore’s cost of living.

Related to this topic:
Can Cashback Credit Cards Help Curb Inflation in Singapore?
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9 Ways to Hedge Against Inflation With Investing

Effects of rising inflation across sectors

Source: MAS, MTI; adapted from Straits Times

Much of the marked core inflation increase is attributed to a corresponding surge in retail, food, electricity and gas prices, among other commodities, explained MAS and MTI in a joint press release. 

A greater trickle-down effect of increased business costs transferred to consumer prices is also likely to happen with increased demand.

So what’s the inflation breakdown across these sectors? 


The change: Food inflation increased from 4.1% in April to 4.5% in May. Prices of non-cooked and food services were increasing at faster rates.

How this affects you: Unfortunately, you might have to revise your grocery and necessity shopping budget again. According to MTI, the average price of a carton of 10 eggs rose from S$2.40 to S$2.60 between December 2021 to 2022 — an 8% increase.

Coincidentally, CNA also conducted a price comparison of essential goods between 2021 and 2022. In February, they found that a pack of 30 Pasar fresh eggs rose from S$4.75 to $6.15 at NTUC Fairprice. Similarly, a 30-egg carton from Sheng Siong also increased from S$4.65 to S$6.15.

Since eggs are considered a food commodity for many recipes, it’s understandable why it’s been hit one of the hardest. Notwithstanding that, Malaysia will also impose bans on the monthly 3.6 million chicken exports starting 1 June — sighting supply shortages compounded by rising chicken prices.

As a result, expect chicken and egg prices to soar a little more. However, this is not a sign to panic buy and stockpile food unnecessarily. 

Not to mention, the Russian-Ukraine War has left an indelible mark on food prices since both countries contribute to the global supply of commodities like wheat (around one-quarter worldwide), barley, corn, livestock feed (e.g. grain) and sunflower seed oil.

What you can do: Download the Price Kaki app to compare prices of groceries, household items and hawker prices islandwide. 

Source: Price Kaki

Through this app, you can filter and sort listings by price, distance, supermarket, and more. It’s arguably the fastest way to get price updates for all your essential goods shopping.

Pro-tip: Look out for NTUC Fairprice’s 5% ‘Stretch Your Dollar’ discount on 100 key essential items every Friday. Valid till 31 December 2022.

Save up to 20% on “Must Buy” items and an extra 25% on “Purchase with Purchase” products (min. S$25 spend).

Simultaneously, maximise your grocery haul during your next trip by using a grocery credit card at checkout. Some cards like Citi Cash Back Card reward you with 8% cashback on groceries whereas others like BOC Sheng Siong Card specifically give you 12% cashback at all Sheng Siong outlets.

Related to this topic:
Supermarket Promos And Discounts For Senior Citizens in Singapore (2022)
14 Cheaper Things to Buy in JB Besides Food, Groceries and Petrol
Latest NTUC Fairprice Promo Codes in Singapore (May 2022)


The change: Retail and other miscellaneous goods inflation increased from 1.6% in April to 1.8% in May, incurring rising prices of clothes and footwear.

How this affects you: Ultra-fast fashion platforms like Shein have been one of the main culprits of overconsumption. From January to April alone, 315,000 new styles have been added to Shein’s online catalogue. Within the same timeframe, H&M and ZARA only added 4,414 new styles to their US websites.

As demand for fast fashion exponentially rises, so will supply – and thereafter, inflicting greater stress on the environment and factory workers’ rights. If supply can’t keep up with demand amid all these pressing concerns, naturally, the prices of your garments will increase.

What you can do: According to a 2021 survey conducted by FleishmanHillard, 60% of Gen Zs have been great ambassadors for slower and more sustainable fashion. For example, thrift stores like Loop Garms, Function Five, STAKEOUT, and others are shopping havens for affordable yet trendy pre-loved clothes. 

Also, instead of shopping directly on popular blog shops (e.g. Lovet, Super Gurl, Young, Hungry & Free), join their secondhand Telegram channels where shoppers sell off their past items at a fraction of original prices.

In the long run, purchasing pre-owned clothes proves to be cheaper, longer-lasting and thus, more value-for-money.

Where applicable, use a cashback credit card to score some decent rebates during your shopping spree. Make thrift shopping sustainable for both your wardrobe and wallet!

Electricity and gas

The change: Electricity and gas inflation has had the most drastic increase, rising from 19.7% in April to 19.9% in May. Much of this was accrued to the electricity and gas tariffs imposed given higher fuel costs, supply and transport bottlenecks, and shortages spurred by the Ukraine-Russian conflict.

How this affects you: This is pretty self-explanatory. The sharp price upturn in European gas futures, Russian oil embargoes and self-sanctions by major oil enterprises are to blame. 

Private car ownership and maintenance in Singapore have inevitably risen. Petrol prices have hit yet another high despite crude oil prices being 15% cheaper now. 

According to the Straits Times,

1-litre of diesel = S$3 to S$3.05
1-litre of 92-octane petrol = S$3.13 to S$3.20
1-litre of 95-octane petrol = S$3.16 to S$3.25
1-litre of 98-grade petrol = S$3.77 to S$3.96 

Prior to savings and discounts, SPC and Sinopec generally offer the cheapest fuel rates.

What you can do: Download the Fuel Kaki app to compare the best prices of petrol and diesel before refuelling your vehicle.

Source: Fuel Kaki

At the same time, motorists are highly encouraged to sign up for a petrol credit card to save on fuel expenses depending on preference.

  92-Octane Petrol 95-Octane Petrol 98-Octane Petrol
Best Petrol Kiosk Caltex Sinopec, Caltex Sinopec, Esso
Best Credit Card

OCBC Voyage

SCB Unlimited Cashback Card

OCBC cards OCBC cards

DBS Esso Card

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Overall, headline inflation remains the same

Albeit high, how has headline inflation managed to remain at 5.4%? This is because the surge in electricity, gas, food and retail prices was offset by a moderation in private transport inflation

Between March and April this year, private transport inflation fell from 21.5 to 18.3% – a welcome relief for many. However, it has since risen slightly to 18.5% in May. This came after previous inflation when the Certificate of Entitlement (COE) premiums hiked up in February.

That said, other sectors of the economy will keep experiencing ramifications of the pandemic and geopolitical instability. 

Until frictions in global transportation, supply chains, and supply-demand mismatches, are resolved, the trajectory for Singapore’s year-on-year overall inflation seems fixed.

Employment-wise, Singapore’s labour market is expected to “remain tight” and facilitate a “firm pace of wage increase” in the coming months, said MAS and MTI. 

Critiques and suggestions for other potential fiscal measures

While the recent policy tightening in April has diffused price tensions a little, it might not be enough. Maybank expressed doubts over the current measures’ efficacy to mitigate external inflationary pressures and alleviate labour market tightness.

They also recommend implementing a supplementary budget to assist lower-income individuals with basic necessities and utility costs.

To further that, Maybank also suggests stricter foreign labour policies, delaying the introduction of the local qualifying salary benchmark and expanding the progressive wage model to Singapore’s retail sector.

Source: CNA

But not all hope is lost; MAS and MTI reassured us that core inflation is not predicted to rise endlessly in the foreseeable future. External inflationary pressures are expected to recede, allowing core inflation figures to moderate by year-end.

However, speculations of core inflation potentially overtaking overall inflation are still at large. 

Related to this topic:
A Recession Is On Its Way — Here’s How You Can Protect Your Investments
Money Confessions: My Wallet Is Not Looking Forward To Post-COVID-19 Life (Especially Going Back To Office)
5 Tips To Better Plan Your Budget in a Post-COVID World

Anything we can do to personally curb inflation?

Bottom line is, storing money idly in a low-interest bank account won’t help much. Moreover, with passive income being all the rage now, many Singaporeans are getting nifty with their saving and investment habits for a healthier financial future.

Here are some tips to get you started:

  1. Deposit your funds into a high-interest savings account.
  2. Lock money away in a (participating) short-term endowment plan to reap higher rates of return in the longer run.
  3. Cash management accounts are great saving/investing hybrids to transform savings into passive income.
  4. Start an investment portfolio with robo-advisors.

Essentially, a currency’s buying power usually depreciates during inflation. Thus, the worth of idle money will only plunge if the rates of return earned aren’t sufficient to compensate for a currency’s diminishing value.

Note: For a more comprehensive beginner’s guide to robo-advisors, read this article.

EDM Lead Gen

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By Emma Lam
With a minor problem of ‘itchy fingers’ for flash deals and sales, Emma is on a lifelong journey to understand what being financially independent in adulthood means. That said, her inner child is still very much alive… with animals and gaming being her weaknesses.

Emma Lam June 24, 2022 90097