Core inflation in Singapore seen steady at 0.5% in April: analyst

UOB expects headline CPI to fall between 0.5% and 0.4% MoM.

Singapore's core inflation is likely to stay muted in April, with economists at UOB projecting a 0.2% to 0.3% MoM increase, translating to an annual core inflation rate of 0.5%—unchanged from March.

In a macro note released Thursday, UOB stated, “We expect price pressures to remain subdued with core inflation rising sequentially by 0.2–0.3% m/m nsa (Mar: -0.1%), translating to an estimated 0.5% y/y core inflation, unchanged compared to the previous month.”

Headline inflation, meanwhile, is forecast to decline. UOB expects headline CPI to fall between 0.5% and 0.4% MoM, resulting in YoY inflation of 0.6%, down from 0.9% in March.

The report attributed the subdued outlook to a mix of factors, including weak external price pressures and a strong Singapore dollar.

“Imported inflation is likely to remain contained given benign external price pressures as proxied by our import-weighted inflation index,” the economists noted.

Singapore's nominal effective exchange rate (S$NEER) also helped curb inflation. “[This was] further tempered by an elevated S$NEER meaningfully above the mid of the policy band especially in the latter half of Apr,” the note added.

Utility costs are expected to exert some upward pressure due to the 10% water price hike effective April 1, but electricity tariffs remain unchanged for Q2 2025. Meanwhile, airfares are forecast to contribute to deflationary pressure in April’s CPI reading.

UOB pointed to “weaker momentum in airfares CPI… partly due to SG60 discounts for selected flights by a domestic airline carrier,” and highlighted broader trends mirroring the US, where airfares have also been declining.

The report linked this to lower fuel prices with Brent crude averaging US$66 per barrel in April, down from US$75 in February, and possibly weaker global travel demand amid uncertain economic conditions.