Analysts see inflation staying muted after January core eases

UOB maintains its April tightening view, as RHB expects the MAS to remain on hold in H1 26.

Core inflation eased to 1.0% YoY in January, whilst headline inflation ticked up to 1.4%, prompting economists to keep 2026 inflation forecasts largely unchanged.

UOB said the core reading was a downside surprise, noting core CPI fell 0.3% MoM on a non-seasonally adjusted basis, below market and its own expectations.

It attributed the softer core print mainly to education costs falling 2.28% MoM, alongside declines in recreation, sport and culture, and airfares down 4.2% MoM.

UOB maintained its 2026 headline and core inflation forecasts at 1.5% and said it expects the Monetary Authority of Singapore to steepen the Singapore dollar nominal effective exchange rate policy band slope by 50 basis points to 1.0% per annum at the April 2026 meeting, although it flagged a risk of delay until July.

RHB also kept its 2026 headline and core inflation forecast at 1.5% and said tame inflation and a resilient backdrop suggest MAS is likely to keep policy settings unchanged at least into the first half of 2026.

In a separate market comment, eToro analyst Zavier Wong said the dip in core inflation suggests the broad price environment is “not building momentum yet”, whilst noting headline increases were concentrated in transport and healthcare and flagging external risks such as new US tariff measures.

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