Singapore core inflation at 1.4% on year in April

Source Credit : Portfolio Prints

Singapore’s inflation eased more than expected in April, offering a temporary reprieve for consumers even as authorities warned that rising geopolitical tensions in the Middle East could reignite imported price pressures in the months ahead.

Official data released Monday showed headline consumer inflation rising 1.8% year-on-year, below the 2% forecast in a Reuters poll of economists. The softer reading was driven by slower increases in services, retail, and other goods prices.

Core inflation — which excludes accommodation and private transport costs — also came in lower than anticipated at 1.4%, compared with market expectations of 1.7%.

Despite the cooler inflation print, Singapore’s Ministry of Trade and Industry and the Monetary Authority of Singapore (MAS) cautioned that imported inflation risks remain elevated.

“As higher energy and other input costs arising from developments in the Middle East pass through global supply chains, they will raise production and transport costs for a wider range of Singapore’s imported goods and services,” the authorities said in a joint statement.

The warning comes amid concerns over energy market disruptions linked to tensions around the Strait of Hormuz, a critical global oil shipping route.

The MAS currently projects both headline and core inflation to average between 1.5% and 2.5% in 2026.

Zavier Wong, market analyst at trading platform eToro, described the latest inflation data as “a mild positive surprise.” He added that easing oil prices and signs of progress in Middle East peace talks could create “a credible path to some imported cost relief” later this year.

Separately, Singapore sharply upgraded its first-quarter economic growth estimate to 6%, from an earlier estimate of 4.6%, surpassing Reuters expectations of 5.1%.

The Ministry of Trade and Industry maintained its full-year 2026 GDP growth forecast at 2% to 4%, though it acknowledged continued uncertainty stemming from energy-related disruptions in global trade routes.

In April, the MAS tightened monetary policy for the first time in nearly three years in response to the evolving inflation outlook.

Unlike most central banks, Singapore manages monetary policy through the exchange rate rather than interest rates. The MAS guides the Singapore dollar within an undisclosed policy band against a trade-weighted basket of currencies, using exchange-rate adjustments as its primary tool to contain inflation and support economic stability.