The recent announcement of a 7% increase in public transport fares, set to take effect on December 23, 2023, is projected to contribute an additional 0.17 percentage point to Singapore’s core inflation rate in 2024. This information was shared by Trade and Industry Minister Gan Kim Yong in response to a parliamentary inquiry on October 4.

Public transport fares, which encompass both bus and train services, make up 1.6% of Singapore’s overall Consumer Price Index (CPI) for All Items inflation basket. They also constitute 2.5% of the core inflation basket, which excludes costs related to private transportation.

In the same context, Gan addressed concerns regarding the influence of higher certificate of entitlement (COE) prices on inflation, stating that the ministry cannot project COE prices for the upcoming year, thus leaving the impact on inflation uncertain. It’s worth noting that car prices, which include COE premiums, account for 7.4% of the headline inflation basket.

The fare increase is anticipated to have broader implications for Singapore’s inflation metrics, highlighting the interconnectedness of transportation costs and overall economic conditions.