Singapore's core inflation falls to 0.8% in January

Headline inflation eased to 1.2% YoY.

Singapore's core inflation decreased to 0.8% year-on-year (y-o-y) in January, down from 1.7% in December.

This was largely attributed to lower inflation across all broad categories within the core consumer price index (CPI). On a month-on-month (MoM) basis, the core CPI fell by 0.2%.

CPI-all Items inflation also eased to 1.2% y-o-y in January, compared to 1.5% in December, reflecting lower accommodation inflation alongside the decline in core inflation. On a MoM basis, CPI-All Items dropped by 0.7%.

Imported inflation is expected to remain moderate, with favorable supply projections for key food commodities and lower global oil prices, said the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) in a joint release.

Although trade tensions could increase inflationary pressures in some economies, their impact on Singapore's import prices is likely to be offset by weaker global demand, it added.

The MAS policy of maintaining a modest and gradual appreciation of the trade-weighted Singapore dollar will also continue to help contain imported inflation. On the domestic front, unit labor costs are projected to rise gradually as nominal wage growth slows and productivity increases.

Additionally, enhanced government subsidies for essential services, including public healthcare, preschool education, and public transport, are expected to keep services inflation in check.

MAS forecasts core Inflation to average 1.0% to 2.0% in 2025, whilst CPI-All Items inflation is expected to range from 1.5% to 2.5%.

However, they said, “The outlook for inflation remains subject to uncertainties in the external environment.”