Singapore’s core inflation, a key measure excluding private road transport and accommodation expenses, increased to 1.2% in December compared to the previous year, according to official figures released Friday. This figure matched the median consensus forecast derived from a Reuters poll of economists.
The overall headline inflation rate also reflected an annual increase of 1.2% for December, meeting the forecasted estimate. When looking at the yearly average forecasts, Singapore’s core inflation is expected to ease to 0.7% in 2025 from a significantly higher rate of 2.8% observed in 2024. Similarly, headline inflation is projected to decline to an average of 0.9% in 2025, down from 2.4% in 2024.
In a joint statement released on the same day, the Monetary Authority of Singapore (MAS) together with the Ministry for Trade and Industry (MTI) signaled expectations for both core and headline inflation rates to rise again in 2026 after their anticipated low levels in 2025.
The statement detailed that domestically, growth in unit labour costs is anticipated to increase as productivity growth settles back to normal levels. Concurrently, private consumption demand is expected to remain steady, contributing to inflationary pressures.
The MAS is scheduled to publish revised inflation forecast ranges for 2026 on January 29, coinciding with its monetary policy statement release.
These inflation dynamics bear significance for sectors such as manufacturing, consumer goods, and services, which are sensitive to changes in labour costs and consumption patterns. Market participants and policymakers will be closely monitoring the labour and consumption indicators given their role in shaping inflationary trends and subsequent monetary measures.