Singapore Core Inflation Hits 1.6% as 17% Power Tariff Rise Fuels H2 Risks

Q: As electricity tariffs surge by 17%, how much of this hidden energy shock will secretly drain your household budget by year-end?

For a typical four-room HDB household, the direct hit is about **S$17.14 more a month before GST** from July to September, or roughly **S$51.42 over the quarter**. Based on SP Group’s figures, the average monthly bill rises from **S$100.74 to S$117.88**, before any extra knock-on effects in other parts of the household budget. The broader drain could be larger by year-end because the tariff increase is only the visible part of the shock. Singapore generates about **95% of its electricity from imported natural gas**, and economists at Nomura, UOB and RHB say higher energy costs are now feeding into airfares, food, transport and services. RHB estimates the electricity tariff jump alone could lift the **utilities and other fuels** CPI component by about **6.8% month on month in July**. Gas bills are also rising. Household town gas tariffs are up **7.1%**, from **21.92 cents to 23.48 cents per kWh** before GST, adding another layer of pressure for homes that use piped gas. The hidden cost, then, is not just the utility bill. It is the likely pass-through into groceries, dining, travel and services over the second half of 2026 as firms absorb higher power and transport costs. Official inflation is still relatively modest at **1.9% headline and 1.6% core in June**, but banks expect it to climb further in coming months, especially if oil stays near **US$95 a barrel** and Middle East tensions keep fuel prices elevated.

1 articles · Updated · Singapore Business Review · Jul 26

June core CPI rose to 1.6% year on year from 1.4% in May, and economists said the softer-than-expected reading still points to faster inflation in the second half of 2026.
Broadening price pressure drove that view: Nomura’s “core-core” gauge edged up to 1.3%, while the share of the CPI basket running above 2% climbed to 36.3% from 31.2%.
Higher energy costs are already feeding through food and travel, with airfares up 3.8% month on month, while Singapore’s regulated electricity tariff jumps 17% and gas tariffs 7.1% for July-September.
Banks also flagged Brent near $95 a barrel and an 81% chance of a very strong El Niño in October-December as risks to transport, utility and imported food prices.
Despite those upside risks, Nomura, UOB and RHB all expect the Monetary Authority of Singapore to keep policy unchanged in July, though UOB sees a 40% chance of a steeper Singapore dollar appreciation path.