Singapore’s Inflation Drops to Four-Year Low

Singapore’s inflation fell to its lowest level in nearly four years in February, mainly driven by slower price increases in most sectors, except for retail and other goods. Core inflation (excluding private transport and accommodation) dropped to 0.6% year-on-year, the lowest since June 2021. Headline inflation also decreased to 0.9% from 1.2% in January.

Singapore's inflation hits four-year low, with moderate price increases.

Economists’ Expectations vs Actual Data

The inflation data came in slightly below economists' expectations, with core inflation anticipated at 0.7% and headline CPI at 1%. The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry maintained their inflation outlook, noting that weaker global demand is helping to offset inflation, but acknowledged rising uncertainties.

Monetary Policy Outlook

Economists predict that the uncertainty around inflation could influence MAS’ upcoming monetary policy decisions. Some expect a forecast downgrade, while others foresee a “wait-and-see” approach. The potential impact of global trade tensions, particularly U.S. tariffs, remains a key factor.

Revised Inflation Forecasts

Several analysts have revised their full-year inflation outlooks lower, anticipating softening demand and deflation risks. Core inflation forecasts were adjusted downwards, with key categories such as private transport, food, and services showing slower price increases. Retail goods, however, saw a slight uptick in inflation.