When planning for your finances, knowing the average inflation rate is important for multiple reasons.
Not only does it enable you to evaluate whether your investments are beating inflation, it also allows you to project the future cost of your retirement needs or your children’s tertiary education.
How much has the general cost of living increased over the years? And what’s the average inflation rate in Singapore?
Today, we’ll take a deeper look.
Read on!
Key Findings
The below information is accurate as of 28 February 2022.
The yearly inflation rate in Singapore fluctuates over time.
For 2021 as a whole, the CPI All-Items (or headline/overall) inflation was 2.3%, while the MAS Core Inflation was 0.9%.
On a year-on-year basis in January 2022, headline inflation was 4%, which is the same in December 2021. The core inflation was 2.4%, the highest it has ever been since July 2014.
Because of the recent higher-than-expected inflation data, MAS has revised its inflation forecast for 2022. It now expects headline inflation to be 2.5-3.5% and core inflation to be 2.0-3.0%.
Here are the average annual inflation rates in Singapore over the past years:
Average Headline Inflation Rate (CPI All-Items) | Average Core Inflation Rate (MAS Core Inflation) | |
Over the last 10 years (2011 to 2021) | 1.05% | 1.25% |
Over the last 20 years (2001 to 2021) | 1.54% | 1.49% |
Over the last 30 years (1991 to 2021) | 1.52% | 1.51% |
Read on further for more details.
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What Is Inflation?
Inflation is the rise in the cost of goods and services over time.
While inflation happens most of the time in Singapore, negative inflation, or deflation, can happen too when the general level of prices fall.
According to the Monetary Authority of Singapore (MAS), low and stable inflation is thought to be a core component for long-term sustainable economic growth. The MAS also states that extreme rates of inflation, whether too high or too low, are unfavourable for the economy.
What Is the Consumer Price Index (CPI)?
A key indicator of inflation is the Consumer Price Index (CPI), which measures the change in prices over time of a fixed basket of goods and services typically consumed by resident households.
The CPI data are compiled by the Singapore Department of Statistics.
There are 10 main categories that are tracked:
- Food
- Transport
- Clothing & Footwear
- Communication
- Housing & Utilities
- Recreation & Culture
- Household Durables & Services
- Education
- Healthcare
- Miscellaneous Goods & Services
These categories are further broken down into subcategories.
This fixed basket that is used in the CPI tracks the prices of around 6,800 brands/varieties from 4,200 outlets. How are these prices collected? The data are obtained from various methods:
- Postal enquiries
- Email enquiries
- Electronic returns
- Web scraping data from relevant websites
- Administrative data
- Field interviewers
And because all goods and services are not equally important, a CPI weightage is applied.
2 Ways to Measure Inflation in Singapore
To measure the inflation of a specific area (e.g., cost of healthcare), you’d simply look at the CPI for that category.
Then, we’re able to get the rate of inflation for different categories such as education or healthcare.
However, in order to measure the “general” inflation, two main types of measures are used.
1) CPI All-Items (headline or overall inflation)
2) MAS Core Inflation (core inflation)
What’s the difference between headline inflation and core inflation?
Basically, the CPI All-Items factors in all 10 categories, and the MAS Core Inflation is the CPI All-Items excluding the components of “Accommodation” and “Private Transport”, which belong to the main categories of “Housing & Utilities” and “Transport”, respectively.
The reason why those two components are excluded from the MAS Core Inflation is because they go through short-term fluctuations and don’t form the everyday expenses of most households in Singapore.
In short, while both the headline and core inflation measures can diverge (move away) in the short run, they tend to converge (move together) in the long run.
We should always look at both measures as they tell different tales.
For example, what can we infer if the headline inflation rises by 1% while the core inflation increases by 8%?
If we look solely at the headline inflation, we may simply assume that the costs of goods and services aren’t rising that much. However, when we factor in the core inflation (which removes the influence of the bigger ticket items of accommodation and private transport), we can come to the conclusion that everyday expenses consumed by most households have increased significantly.
How to Calculate the Inflation Rate?
The inflation rate is the percentage increase (or decrease) in the general level of prices over a specified time, usually expressed yearly and sometimes monthly. It can also be expressed over a longer period of time (e.g., over 10 years from 2010 to 2020).
Here’s the formula to calculate the yearly inflation rate:
Inflation Rate = ((CPI of current year) – (CPI of previous year)) / (CPI of previous year) * 100
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What’s the Current Inflation Rate in Singapore? (2022)
As the CPI All-Items (headline/overall) and MAS Core Inflation (core) are commonly used, here are the historical inflation rates for both of them (from 1990 to 2021).
The below information is accurate as of 28 February 2022.
CPI All-Items (headline/overall)
1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
CPI All-Items | 62.743 | 64.901 | 66.357 | 67.878 | 69.978 | 71.185 | 72.167 | 73.627 | 73.428 | 73.445 | 74.435 | 75.19 | 74.896 | 75.261 | 76.518 | 76.877 | 77.617 | 79.251 | 84.504 | 85.008 | 87.408 | 91.995 | 96.205 | 98.474 | 99.483 | 98.963 | 98.436 | 99.004 | 99.438 | 100 | 99.818 | 102.119 |
Headline Inflation Rate (%) | 3.5 | 3.4 | 2.2 | 2.3 | 3.1 | 1.7 | 1.4 | 2.0 | -0.3 | 0.0 | 1.3 | 1.0 | -0.4 | 0.5 | 1.7 | 0.5 | 1.0 | 2.1 | 6.6 | 0.6 | 2.8 | 5.2 | 4.6 | 2.4 | 1.0 | -0.5 | -0.5 | 0.6 | 0.4 | 0.6 | -0.2 | 2.3 |
The headline inflation rate in 2021 was 2.3%. Over a period of 30 years from 1991 to 2021, the highest inflation in a year was 6.6% in 2008, while the lowest was -0.5% in 2015 and 2016. Since 2001 to 2021, the CPI All-Items has increased 35.8%.
Below, we look at headline inflation on a year-on-year basis (e.g., Dec 2021 vs Dec 2020).
2022 Jan | 2021 Dec | 2021 Nov | 2021 Oct | 2021 Sep | 2021 Aug | 2021 Jul | 2021 Jun | 2021 May | 2021 Apr | 2021 Mar | 2021 Feb | 2021 Jan | 2020 Dec | 2020 Nov | 2020 Oct | 2020 Sep | 2020 Aug | 2020 Jul | 2020 Jun | 2020 May | 2020 Apr | 2020 Mar | 2020 Feb | 2020 Jan | 2019 Dec | 2019 Nov | 2019 Oct | 2019 Sep | 2019 Aug | 2019 Jul | 2019 Jun | 2019 May | 2019 Apr | 2019 Mar | 2019 Feb | 2019 Jan | 2018 Dec | 2018 Nov | 2018 Oct | 2018 Sep | 2018 Aug | 2018 Jul | 2018 Jun | 2018 May | 2018 Apr | 2018 Mar | 2018 Feb | 2018 Jan | 2017 Dec | 2017 Nov | 2017 Oct | 2017 Sep | 2017 Aug | 2017 Jul | 2017 Jun | 2017 May | 2017 Apr | 2017 Mar | 2017 Feb | 2017 Jan | 2016 Dec | 2016 Nov | 2016 Oct | 2016 Sep | 2016 Aug | 2016 Jul | 2016 Jun | 2016 May | 2016 Apr | 2016 Mar | 2016 Feb | 2016 Jan | 2015 Dec | 2015 Nov | 2015 Oct | 2015 Sep | 2015 Aug | 2015 Jul | 2015 Jun | 2015 May | 2015 Apr | 2015 Mar | 2015 Feb | 2015 Jan | 2014 Dec | 2014 Nov | 2014 Oct | 2014 Sep | 2014 Aug | 2014 Jul | 2014 Jun | 2014 May | 2014 Apr | 2014 Mar | 2014 Feb | 2014 Jan | 2013 Dec | 2013 Nov | 2013 Oct | 2013 Sep | 2013 Aug | 2013 Jul | 2013 Jun | 2013 May | 2013 Apr | 2013 Mar | 2013 Feb | 2013 Jan | 2012 Dec | 2012 Nov | 2012 Oct | 2012 Sep | 2012 Aug | 2012 Jul | 2012 Jun | 2012 May | 2012 Apr | 2012 Mar | 2012 Feb | 2012 Jan | 2011 Dec | 2011 Nov | 2011 Oct | 2011 Sep | 2011 Aug | 2011 Jul | 2011 Jun | 2011 May | 2011 Apr | 2011 Mar | 2011 Feb | 2011 Jan | 2010 Dec | 2010 Nov | 2010 Oct | 2010 Sep | 2010 Aug | 2010 Jul | 2010 Jun | 2010 May | 2010 Apr | 2010 Mar | 2010 Feb | 2010 Jan | 2009 Dec | 2009 Nov | 2009 Oct | 2009 Sep | 2009 Aug | 2009 Jul | 2009 Jun | 2009 May | 2009 Apr | 2009 Mar | 2009 Feb | 2009 Jan | 2008 Dec | 2008 Nov | 2008 Oct | 2008 Sep | 2008 Aug | 2008 Jul | 2008 Jun | 2008 May | 2008 Apr | 2008 Mar | 2008 Feb | 2008 Jan | 2007 Dec | 2007 Nov | 2007 Oct | 2007 Sep | 2007 Aug | 2007 Jul | 2007 Jun | 2007 May | 2007 Apr | 2007 Mar | 2007 Feb | 2007 Jan | 2006 Dec | 2006 Nov | 2006 Oct | 2006 Sep | 2006 Aug | 2006 Jul | 2006 Jun | 2006 May | 2006 Apr | 2006 Mar | 2006 Feb | 2006 Jan | 2005 Dec | 2005 Nov | 2005 Oct | 2005 Sep | 2005 Aug | 2005 Jul | 2005 Jun | 2005 May | 2005 Apr | 2005 Mar | 2005 Feb | 2005 Jan | 2004 Dec | 2004 Nov | 2004 Oct | 2004 Sep | 2004 Aug | 2004 Jul | 2004 Jun | 2004 May | 2004 Apr | 2004 Mar | 2004 Feb | 2004 Jan | 2003 Dec | 2003 Nov | 2003 Oct | 2003 Sep | 2003 Aug | 2003 Jul | 2003 Jun | 2003 May | 2003 Apr | 2003 Mar | 2003 Feb | 2003 Jan | 2002 Dec | 2002 Nov | 2002 Oct | 2002 Sep | 2002 Aug | 2002 Jul | 2002 Jun | 2002 May | 2002 Apr | 2002 Mar | 2002 Feb | 2002 Jan | 2001 Dec | |
CPI All-Items | 104.472 | 104.439 | 103.959 | 102.950 | 102.657 | 102.231 | 101.672 | 101.870 | 101.883 | 101.070 | 101.239 | 101.015 | 100.440 | 100.469 | 100.105 | 99.711 | 100.139 | 99.807 | 99.178 | 99.500 | 99.480 | 99.012 | 99.933 | 100.279 | 100.204 | 100.445 | 100.254 | 99.930 | 100.147 | 100.209 | 99.587 | 100.038 | 100.325 | 99.753 | 99.972 | 99.953 | 99.387 | 99.686 | 99.610 | 99.447 | 99.753 | 99.778 | 99.359 | 99.505 | 99.449 | 98.833 | 99.299 | 99.501 | 99.035 | 99.225 | 99.322 | 98.750 | 99.036 | 99.056 | 98.726 | 98.956 | 99.098 | 98.762 | 99.064 | 99.023 | 99.026 | 98.854 | 98.699 | 98.383 | 98.666 | 98.657 | 98.173 | 98.449 | 97.724 | 98.365 | 98.416 | 98.375 | 98.476 | 98.693 | 98.684 | 98.487 | 98.912 | 98.911 | 98.818 | 99.171 | 99.279 | 98.829 | 99.449 | 99.211 | 99.114 | 99.328 | 99.441 | 99.255 | 99.553 | 99.742 | 99.213 | 99.508 | 99.676 | 99.342 | 99.749 | 99.484 | 99.506 | 99.404 | 99.720 | 99.020 | 98.865 | 98.718 | 97.929 | 97.656 | 97.457 | 97.112 | 98.574 | 99.107 | 98.121 | 97.936 | 97.225 | 97.100 | 97.298 | 96.744 | 96.146 | 95.924 | 95.917 | 95.718 | 95.207 | 94.491 | 94.748 | 93.877 | 93.842 | 93.322 | 92.941 | 93.115 | 92.448 | 91.103 | 91.318 | 90.774 | 90.458 | 90.339 | 90.405 | 88.954 | 88.818 | 88.525 | 88.129 | 88.081 | 87.676 | 86.567 | 87.402 | 86.901 | 86.115 | 86.048 | 85.682 | 85.050 | 85.566 | 85.521 | 85.008 | 85.307 | 85.003 | 84.283 | 84.656 | 84.206 | 84.751 | 85.236 | 85.507 | 85.501 | 86.245 | 86.304 | 85.361 | 85.544 | 85.216 | 84.296 | 84.451 | 83.933 | 82.632 | 82.558 | 82.002 | 81.147 | 81.716 | 81.095 | 79.963 | 80.374 | 79.958 | 78.384 | 78.537 | 78.025 | 77.430 | 77.479 | 76.904 | 78.161 | 77.930 | 77.930 | 77.627 | 77.694 | 77.651 | 77.069 | 77.556 | 77.673 | 77.252 | 77.509 | 77.355 | 77.534 | 77.509 | 77.604 | 77.289 | 77.180 | 76.817 | 76.020 | 76.720 | 76.843 | 76.373 | 76.597 | 76.038 | 76.569 | 76.767 | 76.788 | 76.816 | 76.659 | 76.758 | 76.147 | 76.747 | 76.564 | 76.051 | 76.613 | 75.741 | 75.578 | 75.443 | 75.340 | 75.392 | 75.312 | 75.224 | 74.757 | 74.981 | 75.460 | 75.307 | 75.097 | 75.235 | 75.019 | 75.022 | 74.855 | 74.877 | 74.970 | 75.023 | 75.000 | 75.047 | 74.814 | 74.734 | 74.804 | 74.584 | 74.693 |
Headline Inflation Rate (%) [Year-on-Year] | 4.0 | 4.0 | 3.8 | 3.2 | 2.5 | 2.4 | 2.5 | 2.4 | 2.4 | 2.1 | 1.3 | 0.7 | 0.2 | 0.0 | -0.1 | -0.2 | 0.0 | -0.4 | -0.4 | -0.5 | -0.8 | -0.7 | 0.0 | 0.3 | 0.8 | 0.8 | 0.6 | 0.5 | 0.4 | 0.4 | 0.2 | 0.5 | 0.9 | 0.9 | 0.7 | 0.5 | 0.4 | 0.5 | 0.3 | 0.7 | 0.7 | 0.7 | 0.6 | 0.6 | 0.4 | 0.1 | 0.2 | 0.5 | 0.0 | 0.4 | 0.6 | 0.4 | 0.4 | 0.4 | 0.6 | 0.5 | 1.4 | 0.4 | 0.7 | 0.7 | 0.6 | 0.2 | 0.0 | -0.1 | -0.2 | -0.3 | -0.7 | -0.7 | -1.6 | -0.5 | -1.0 | -0.8 | -0.6 | -0.6 | -0.8 | -0.8 | -0.6 | -0.8 | -0.4 | -0.3 | -0.4 | -0.5 | -0.3 | -0.3 | -0.4 | -0.1 | -0.3 | 0.2 | 0.7 | 1.0 | 1.3 | 1.9 | 2.3 | 2.3 | 1.2 | 0.4 | 1.4 | 1.5 | 2.6 | 2.0 | 1.6 | 2.0 | 1.9 | 1.8 | 1.6 | 1.5 | 3.5 | 4.9 | 3.6 | 4.3 | 3.6 | 4.0 | 4.7 | 3.9 | 4.0 | 5.3 | 5.0 | 5.4 | 5.2 | 4.6 | 4.8 | 5.5 | 5.7 | 5.4 | 5.5 | 5.7 | 5.4 | 5.2 | 4.5 | 4.5 | 5.0 | 5.0 | 5.5 | 4.6 | 3.8 | 3.5 | 3.7 | 3.3 | 3.1 | 2.7 | 3.2 | 3.2 | 1.6 | 1.0 | 0.2 | -0.5 | -0.8 | -0.9 | -0.4 | -0.3 | -0.2 | 0.0 | 0.2 | 0.3 | 2.6 | 3.2 | 4.3 | 5.4 | 5.5 | 6.4 | 6.8 | 6.4 | 6.6 | 7.5 | 7.5 | 7.6 | 6.7 | 6.6 | 6.6 | 3.8 | 4.9 | 4.1 | 3.0 | 3.4 | 3.0 | 1.7 | 1.3 | 0.5 | 0.2 | 0.0 | -0.6 | 0.8 | 0.5 | 0.4 | 0.4 | 0.7 | 1.1 | 1.4 | 1.1 | 1.1 | 1.2 | 1.2 | 1.7 | 1.3 | 1.0 | 1.1 | 0.6 | 0.7 | 0.1 | -0.2 | 0.0 | 0.4 | 0.4 | 0.0 | 0.4 | 1.3 | 1.8 | 1.9 | 1.9 | 1.8 | 2.0 | 1.9 | 2.4 | 1.5 | 1.0 | 2.0 | 0.7 | 0.7 | 0.6 | 0.6 | 0.7 | 0.5 | 0.3 | -0.3 | -0.1 | 0.9 | 0.8 | 0.4 | 0.9 | 0.4 | 0.2 | -0.2 | -0.4 | -0.4 | -0.4 | 0.1 | -0.3 | -1.1 | -0.9 | -0.6 | -1.1 | -0.6 |
The headline inflation rate in Jan 2022 was 4.0%, which is the same as the previous period. This is the highest it has ever been since Feb 2013 (4.9%).
MAS Core Inflation (core)
1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
MAS Core Inflation | 62.094 | 64.359 | 65.398 | 66.562 | 68.247 | 69.744 | 70.998 | 72.092 | 72.377 | 72.737 | 73.818 | 74.965 | 74.927 | 75.632 | 77.136 | 78.105 | 79.445 | 81.195 | 85.803 | 85.783 | 87.084 | 88.971 | 91.239 | 92.8 | 94.608 | 95.076 | 95.934 | 97.327 | 98.967 | 100 | 99.845 | 100.769 |
Core Inflation Rate (%) | 2.3 | 3.6 | 1.6 | 1.8 | 2.5 | 2.2 | 1.8 | 1.5 | 0.4 | 0.5 | 1.5 | 1.6 | -0.1 | 0.9 | 2.0 | 1.3 | 1.7 | 2.2 | 5.7 | 0.0 | 1.5 | 2.2 | 2.5 | 1.7 | 1.9 | 0.5 | 0.9 | 1.5 | 1.7 | 1.0 | -0.2 | 0.9 |
The core inflation rate in 2021 was 0.9%. Over a period of 30 years from 1991 to 2021, the highest annual inflation was 5.7% in 2008, while the lowest was -0.2% in 2020.
From 2001 to 2021, the MAS Core Inflation rose 34.4%. Hypothetically, this would also mean that over a period of 20 years, a $10 basket of regular day-to-day expenses in 2001 would cost $13.44 in 2021.
Below, we look at the core inflation on a year-on-year basis.
2022 Jan | 2021 Dec | 2021 Nov | 2021 Oct | 2021 Sep | 2021 Aug | 2021 Jul | 2021 Jun | 2021 May | 2021 Apr | 2021 Mar | 2021 Feb | 2021 Jan | 2020 Dec | 2020 Nov | 2020 Oct | 2020 Sep | 2020 Aug | 2020 Jul | 2020 Jun | 2020 May | 2020 Apr | 2020 Mar | 2020 Feb | 2020 Jan | 2019 Dec | 2019 Nov | 2019 Oct | 2019 Sep | 2019 Aug | 2019 Jul | 2019 Jun | 2019 May | 2019 Apr | 2019 Mar | 2019 Feb | 2019 Jan | 2018 Dec | 2018 Nov | 2018 Oct | 2018 Sep | 2018 Aug | 2018 Jul | 2018 Jun | 2018 May | 2018 Apr | 2018 Mar | 2018 Feb | 2018 Jan | 2017 Dec | 2017 Nov | 2017 Oct | 2017 Sep | 2017 Aug | 2017 Jul | 2017 Jun | 2017 May | 2017 Apr | 2017 Mar | 2017 Feb | 2017 Jan | 2016 Dec | 2016 Nov | 2016 Oct | 2016 Sep | 2016 Aug | 2016 Jul | 2016 Jun | 2016 May | 2016 Apr | 2016 Mar | 2016 Feb | 2016 Jan | 2015 Dec | 2015 Nov | 2015 Oct | 2015 Sep | 2015 Aug | 2015 Jul | 2015 Jun | 2015 May | 2015 Apr | 2015 Mar | 2015 Feb | 2015 Jan | 2014 Dec | 2014 Nov | 2014 Oct | 2014 Sep | 2014 Aug | 2014 Jul | 2014 Jun | 2014 May | 2014 Apr | 2014 Mar | 2014 Feb | 2014 Jan | 2013 Dec | 2013 Nov | 2013 Oct | 2013 Sep | 2013 Aug | 2013 Jul | 2013 Jun | 2013 May | 2013 Apr | 2013 Mar | 2013 Feb | 2013 Jan | 2012 Dec | 2012 Nov | 2012 Oct | 2012 Sep | 2012 Aug | 2012 Jul | 2012 Jun | 2012 May | 2012 Apr | 2012 Mar | 2012 Feb | 2012 Jan | 2011 Dec | 2011 Nov | 2011 Oct | 2011 Sep | 2011 Aug | 2011 Jul | 2011 Jun | 2011 May | 2011 Apr | 2011 Mar | 2011 Feb | 2011 Jan | 2010 Dec | 2010 Nov | 2010 Oct | 2010 Sep | 2010 Aug | 2010 Jul | 2010 Jun | 2010 May | 2010 Apr | 2010 Mar | 2010 Feb | 2010 Jan | 2009 Dec | 2009 Nov | 2009 Oct | 2009 Sep | 2009 Aug | 2009 Jul | 2009 Jun | 2009 May | 2009 Apr | 2009 Mar | 2009 Feb | 2009 Jan | 2008 Dec | 2008 Nov | 2008 Oct | 2008 Sep | 2008 Aug | 2008 Jul | 2008 Jun | 2008 May | 2008 Apr | 2008 Mar | 2008 Feb | 2008 Jan | 2007 Dec | 2007 Nov | 2007 Oct | 2007 Sep | 2007 Aug | 2007 Jul | 2007 Jun | 2007 May | 2007 Apr | 2007 Mar | 2007 Feb | 2007 Jan | 2006 Dec | 2006 Nov | 2006 Oct | 2006 Sep | 2006 Aug | 2006 Jul | 2006 Jun | 2006 May | 2006 Apr | 2006 Mar | 2006 Feb | 2006 Jan | 2005 Dec | 2005 Nov | 2005 Oct | 2005 Sep | 2005 Aug | 2005 Jul | 2005 Jun | 2005 May | 2005 Apr | 2005 Mar | 2005 Feb | 2005 Jan | 2004 Dec | 2004 Nov | 2004 Oct | 2004 Sep | 2004 Aug | 2004 Jul | 2004 Jun | 2004 May | 2004 Apr | 2004 Mar | 2004 Feb | 2004 Jan | 2003 Dec | 2003 Nov | 2003 Oct | 2003 Sep | 2003 Aug | 2003 Jul | 2003 Jun | 2003 May | 2003 Apr | 2003 Mar | 2003 Feb | 2003 Jan | 2002 Dec | 2002 Nov | 2002 Oct | 2002 Sep | 2002 Aug | 2002 Jul | 2002 Jun | 2002 May | 2002 Apr | 2002 Mar | 2002 Feb | 2002 Jan | 2001 Dec | |
MAS Core Inflation | 102.516 | 102.084 | 101.516 | 101.296 | 101.012 | 100.784 | 100.542 | 100.314 | 100.508 | 100.368 | 100.357 | 100.321 | 100.121 | 99.977 | 99.873 | 99.839 | 99.818 | 99.654 | 99.505 | 99.720 | 99.703 | 99.766 | 99.865 | 100.142 | 100.276 | 100.253 | 99.952 | 100.013 | 99.936 | 99.961 | 99.881 | 99.899 | 99.879 | 100.027 | 100.030 | 100.210 | 99.961 | 99.682 | 99.389 | 99.527 | 99.345 | 99.312 | 99.311 | 98.812 | 98.627 | 98.613 | 98.356 | 98.507 | 98.112 | 97.837 | 97.743 | 97.705 | 97.555 | 97.444 | 97.475 | 97.171 | 97.177 | 97.332 | 96.883 | 96.836 | 96.763 | 96.561 | 96.311 | 96.239 | 96.149 | 96.061 | 95.966 | 95.694 | 95.662 | 95.727 | 95.734 | 95.726 | 95.363 | 95.384 | 95.120 | 95.199 | 95.280 | 95.104 | 95.033 | 94.663 | 94.694 | 94.950 | 95.206 | 95.283 | 94.997 | 95.141 | 94.958 | 94.951 | 94.726 | 94.873 | 94.679 | 94.489 | 94.600 | 94.539 | 94.224 | 94.020 | 94.086 | 93.715 | 93.631 | 93.330 | 93.078 | 93.046 | 92.624 | 92.535 | 92.523 | 92.372 | 92.325 | 92.407 | 92.005 | 91.835 | 91.679 | 91.653 | 91.519 | 91.421 | 91.196 | 90.990 | 91.020 | 91.131 | 90.804 | 90.710 | 90.903 | 90.122 | 89.904 | 89.646 | 89.378 | 89.409 | 89.054 | 88.630 | 88.630 | 88.736 | 88.210 | 88.101 | 87.821 | 87.799 | 87.810 | 87.629 | 87.498 | 87.515 | 87.175 | 86.657 | 86.779 | 86.834 | 86.640 | 86.565 | 86.099 | 85.992 | 85.937 | 85.933 | 85.491 | 85.510 | 85.451 | 85.171 | 85.305 | 85.495 | 86.330 | 86.211 | 86.568 | 87.250 | 87.177 | 87.144 | 86.252 | 86.226 | 85.904 | 85.425 | 85.377 | 85.276 | 84.729 | 84.582 | 84.287 | 83.724 | 82.606 | 82.123 | 81.669 | 81.500 | 81.309 | 80.210 | 80.201 | 80.131 | 80.229 | 80.351 | 80.287 | 80.217 | 80.019 | 79.778 | 79.475 | 79.468 | 79.347 | 78.956 | 79.069 | 79.180 | 79.217 | 79.230 | 79.380 | 78.950 | 78.887 | 78.719 | 78.289 | 78.242 | 77.996 | 77.569 | 77.753 | 77.804 | 77.796 | 77.656 | 77.591 | 77.398 | 77.470 | 77.367 | 77.380 | 77.054 | 77.118 | 76.987 | 77.125 | 77.063 | 76.976 | 76.882 | 76.805 | 76.111 | 75.954 | 75.829 | 75.872 | 75.719 | 75.600 | 75.001 | 75.310 | 75.833 | 75.472 | 75.321 | 75.552 | 75.292 | 75.219 | 74.983 | 75.009 | 74.973 | 75.036 | 74.938 | 74.935 | 74.720 | 74.665 | 74.798 | 74.552 | 74.698 |
Core Inflation Rate (%) [Year-on-Year] | 2.4 | 2.1 | 1.6 | 1.5 | 1.2 | 1.1 | 1.0 | 0.6 | 0.8 | 0.6 | 0.5 | 0.2 | -0.2 | -0.3 | -0.1 | -0.2 | -0.1 | -0.3 | -0.4 | -0.2 | -0.2 | -0.3 | -0.2 | -0.1 | 0.3 | 0.6 | 0.6 | 0.5 | 0.6 | 0.7 | 0.6 | 1.1 | 1.3 | 1.4 | 1.7 | 1.7 | 1.9 | 1.9 | 1.7 | 1.9 | 1.8 | 1.9 | 1.9 | 1.7 | 1.5 | 1.3 | 1.5 | 1.7 | 1.4 | 1.3 | 1.5 | 1.5 | 1.5 | 1.4 | 1.6 | 1.5 | 1.6 | 1.7 | 1.2 | 1.2 | 1.5 | 1.2 | 1.3 | 1.1 | 0.9 | 1.0 | 1.0 | 1.1 | 1.0 | 0.8 | 0.6 | 0.5 | 0.4 | 0.3 | 0.2 | 0.3 | 0.6 | 0.2 | 0.4 | 0.2 | 0.1 | 0.4 | 1.0 | 1.3 | 1.0 | 1.5 | 1.4 | 1.7 | 1.8 | 2.0 | 2.2 | 2.1 | 2.2 | 2.3 | 2.1 | 1.7 | 2.3 | 2.0 | 2.1 | 1.8 | 1.7 | 1.8 | 1.6 | 1.7 | 1.7 | 1.4 | 1.7 | 1.9 | 1.2 | 1.9 | 2.0 | 2.2 | 2.4 | 2.3 | 2.4 | 2.7 | 2.7 | 2.7 | 2.9 | 3.0 | 3.5 | 2.6 | 2.4 | 2.3 | 2.1 | 2.2 | 2.2 | 2.3 | 2.1 | 2.2 | 1.8 | 1.8 | 2.0 | 2.1 | 2.2 | 2.0 | 2.3 | 2.3 | 2.0 | 1.7 | 1.7 | 1.6 | 0.4 | 0.4 | -0.5 | -1.4 | -1.4 | -1.4 | -0.9 | -0.8 | -0.5 | -0.3 | -0.1 | 0.3 | 1.9 | 1.9 | 2.7 | 4.2 | 5.5 | 6.1 | 5.6 | 5.8 | 5.7 | 6.5 | 6.5 | 6.4 | 5.6 | 5.3 | 5.0 | 4.4 | 3.2 | 2.9 | 2.8 | 2.6 | 2.5 | 1.6 | 1.4 | 1.2 | 1.3 | 1.4 | 1.1 | 1.6 | 1.4 | 1.3 | 1.5 | 1.6 | 1.7 | 1.8 | 1.7 | 1.8 | 1.8 | 2.0 | 2.3 | 2.0 | 1.8 | 1.7 | 1.2 | 1.5 | 1.1 | 0.8 | 0.8 | 1.0 | 1.1 | 1.0 | 1.0 | 1.7 | 2.0 | 2.0 | 2.0 | 1.8 | 2.0 | 2.6 | 2.4 | 1.6 | 2.0 | 2.1 | 1.7 | 1.1 | 1.0 | 1.1 | 1.2 | 1.0 | 0.8 | 0.1 | 0.5 | 1.5 | 1.1 | 0.7 | 1.3 | 0.8 | 0.6 | 0.2 | 0.1 | -0.1 | -0.1 | 0.2 | 0.0 | -0.8 | -0.5 | -0.2 | -0.8 | 0.1 |
The MAS core inflation rate in Jan 2022 was 2.4%. This is the highest it has ever been since Jul 2014 (2.2%).
Overall, if we were to combine both graphs of the CPI All-Items and the MAS Core Inflation together, here’s what it’ll look like:
Singapore’s Inflation Rate Forecast (2022)
According to MAS, in 2022, the CPI All-Items inflation was expected to be 1.5-2.5% and the MAS Core Inflation to be between 1-2%.
However, because of the recent higher-than-expected inflation data, MAS has revised its forecast. It now expects CPI All-Items inflation to be 2.5-3.5% and MAS Core Inflation to be 2.0-3.0% in 2022.
What Is the Average Annual Inflation Rate in Singapore?
In financial planning, one of the most common applications for an average annual inflation rate is the ability to project future costs.
It is essential to do so because you can’t just take your current level of expenses and expect it to be the same decades later; costs will rise.
Using a constant average rate of inflation – though it may not be reflective of actual price increases – provides simplicity in planning since inflation rates fluctuate all the time.
In order to calculate the average, you can’t just take the sum of the annual inflation rates over a period and divide it by the number of years.
Instead, this formula should be used: PV (1+r)^n = FV
Where
r = the compound average annual rate of inflation
n = the number of years
PV = the CPI for the 1st Year
FV = the CPI for the 2nd Year
(We can use a financial calculator for this.)
And here are the average annual inflation rates in Singapore:
Average Headline Inflation Rate (CPI All-Items) | Average Core Inflation Rate (MAS Core Inflation) | |
Over the last 10 years (2011 to 2021) | 1.05% | 1.25% |
Over the last 20 years (2001 to 2021) | 1.54% | 1.49% |
Over the last 30 years (1991 to 2021) | 1.52% | 1.51% |
Why Is Singapore’s Inflation Rate So Low?
When you look at the average yearly inflation rates above, you may wonder why they are so low, because it often doesn’t feel like that in daily life.
One reason for this could be our own unique experiences and perceptions. For example, when we only pay attention to certain items that we don’t purchase often and notice a “sudden” increase, we may think that prices are rising at a fast pace.
Another reason for this “disconnect” is because of a limitation to the CPI’s data.
In compiling the prices of different goods and services, a fixed basket has to be used since it’s almost impossible to track the price of every single item out there. As a result, actual household expenses may deviate from these data (i.e., not all households buy the same items).
Having said that, the data still provide meaningful insights.
How to Project Future Costs?
Taking a look at the average rates, we can see that they don’t exceed 2.00%.
To project future costs, we should include a buffer in order to ensure that we still have enough in case things go sideways. For that, you could assume a rate of 3.00 or 4.00%.
To calculate how much you need for retirement, you can simply take your expected expenses during retirement (in today’s value) and apply an inflation rate of, say, 3.00% over the number of years to your retirement age. Or, you can simply use a retirement planning calculator.
The same concept applies to calculating your children’s education fund.
Apart from projecting future costs, you can also estimate the “real” rate of return on an investment by simply taking the expected rate from that investment and subtracting the inflation rate.
In knowing the average inflation, you can also see how your cash is devaluing over time. To illustrate, if you leave $10,000 in the bank while earning 0.05% per year with an annual inflation of 3%, that “value” is worth only $5,494.28 after 20 years.
What Can You Do About the Rising Cost of Living and How to Beat Inflation?
A moderate amount of inflation is perfectly normal in a growing economy.
Singapore has gone through good economic growth, and its standard of living (and the costs of it) have gone up since its independence.
It’s very likely that inflation will continue for a long time, and along with it, effects such as the rising cost of living and cash in the bank losing value over time.
So what can we do to prepare for this?
Firstly, it’s vital to have the various types of insurance plans in place, so that your income and your wealth can remain protected.
Outside of having sufficient emergency funds and short-term financial goals and commitments, you should consider placing your excess cash into various alternatives that can provide potentially higher returns above the average annual inflation rate.
If you’re planning for your retirement, consider some options to invest your money, depending on your risk appetite.