Inflation hits four-year low of 0.5% in March

CPI-All Items inflation came in at 0.9% y-o-y in March, unchanged from the month before.

Core inflation rates in Singapore dipped to 0.5% year-on-year (YoY) in March from 0.6% in February, driven by lower inflation across all broad core Consumer Price Index (CPI) categories other than food, recent government data revealed.

CPI-All Items inflation came in at 0.9% YoY in March, unchanged from February. Government data said that larger increases in the costs of food and private transport were offset by lower inflation in the other major categories of the CPI basket.

Food inflation went up 1.3% YoY as the prices of non-cooked food and prepared meals rose at a quicker pace. Private transport inflation picked up 2.1% YoY due to larger increases in car prices.

Meanwhile, the cost of retail & other goods fell 0.5% in March on account of larger declines in the prices of information & communication equipment and household appliances. Both electricity and gas prices fell at a faster pace of 3.5%.

A joint statement by the Monetary Authority of Singapore and the Ministry of Trade said they expect imported inflation to remain moderate. Amidst slowing global demand and ample supply conditions, global crude oil prices are projected to be lower compared to 2024.

Food commodity price increases should also stay contained. Although the escalation in trade conflicts could be inflationary for some economies, their impact on Singapore’s import prices is likely to be more than offset by the disinflationary drags exerted by weaker global demand.

The government said that on the domestic front, unit labour costs are projected to rise gradually as nominal wage growth continues to ease, even as productivity increases. At the same time, enhanced government subsidies for essential services such as public healthcare, pre-school education and public transport will continue to dampen services inflation.

Reflecting these factors, both MAS Core Inflation and CPI-All Items inflation are projected to average 0.5–1.5% in 2025. The risks to inflation are tilted towards the downside given heightened uncertainties in the external environment.