The July rate fell from 7.5 percent, a 26-year peak recorded in April, May and June.

But last month's figure was higher than the average 6.2 percent forecast in a poll of economists by Dow Jones Newswires.

The Department of Statistics said July's consumer price index (CPI) increased primarily because of higher costs for housing, food, and transport and communication.

On a seasonally adjusted basis the July CPI was 0.4 percent higher than in June, the statistics department said.

Singapore's de facto central bank late last month raised its inflation forecast for 2008 to 6.0-7.0 percent from 5.0-6.0 percent.

The bank said external developments, including higher prices for oil and food, and inflation in the country's trading partners, had affected Singapore because of its open economy and heavy dependence on imports.

The tiny city-state imports most of its needs because it lacks the natural resources and agricultural base of its bigger neighbours.

The city-state is one of Asia's wealthiest, with per capita income of US$28,730, but charities have reported more people joining queues for free meals.

Prime Minister Lee Hsien Loong last week announced a 50 percent increase in assistance to help his countrymen deal with the rising cost of living, which he described as the country's "hottest issue."

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