SG Morning Highlights | Headline Inflation Eases to 4.1% in July Due to Private Transportation Costs

Advancers / Decliners is 105 to 28, with 116.76 million securities worth S$85.29 million changing hands.

Singapore's headline inflation eased to 4.1% year-on-year in July 2023 from 4.2% in June, said the Monetary Authority of Singapore (MAS). Core inflation declined 3.8% YoY in July 2023 from 4.2% in June. MAS said the decline was due to smaller increase in food prices and fall in electricity and gas prices. Headline inflation eased due to reflected lower private transport inflation, in addition to the decline in core inflation. On a monthly basis, core inflation increased 0.2% in July due to higher prices in food and services. Headline inflation, on a monthly basis, fell 0.2% in July due to lower transportation costs and lower accommodation prices.

Inbound travel into Asean destinations will likely continue to improve in the second half of this year, albeit at a slower pace compared with last year and the first six months of 2023, said market watchers. The continued pick-up in tourism “will provide some buffer to growth and current account balances in the region, especially as the goods export outlook remains lacklustre”, said OCBC senior Asean economist Lavanya Venkateswaran in a report. China, in particular, will be a major contributor to the region’s tourism receipts.

Singapore’s fund flows remained healthy in Q2, with the overall performance of funds linked to its Central Provident Fund Investment Scheme (CPFIS) rising by 2.55% during the quarter, according to the latest report from Morningstar. Although slightly slower than the 3.39% returns in Q1, Morningstar noted that the scheme still netted growth where global bonds–which Morningstar measured through the FTSE WGBI Index–logged negative returns. Looking ahead, Singapore's economic growth is expected to slow down sequentially in the third and fourth quarters of 2023. This may limit the rate of market gains, said Bryan Cheung, associate director of manager research at Morningstar.