SINGAPORE – Singapore’s core inflation held steady in May, but the authorities warn that higher energy costs are expected to raise production and transport costs for a wider range of imported goods and services over time.
Core inflation – which excludes private transport and accommodation to better reflect household expenses – came in at 1.4 per cent in May, unchanged from April.
Overall inflation was 1.8 per cent in May, also unchanged from April.
This was because higher private transport and accommodation inflation, together with firmer food and retail and other goods inflation, was largely offset by lower services inflation, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said in a joint release on June 23.
The authorities also warned that global energy costs, which remain higher than in 2025, are not yet fully reflected in local prices.
“As higher energy costs pass through global supply chains with a lag, they are expected to raise production and transport costs for a wider range of Singapore’s imported goods and services over time,” they said.
Indeed, private transport inflation saw the biggest jump from 8.1 per cent in April to 8.6 per cent in May, driven by larger increases in car and motorcycle prices.
Food inflation rose 0.2 percentage points to 1.8 per cent in May as the prices of non-cooked food and food services rose at a quicker pace.
Retail and other goods inflation crept up to 1.6 per cent in May, from 1.5 per cent in April, as the prices of both personal care appliances and information & communication equipment rose faster.
Higher housing rents pushed accommodation inflation up to 0.5 per cent in May from 0.4 per cent in April.
Services inflation fell to 1.3 per cent in May, from 1.5 per cent in April, due to a sharper drop in telecommunication services prices.
Electricity and gas prices fell by 3 per cent in May, unchanged from April’s decline, but this masks a lag in tariff setting.
Regulated quarterly electricity tariffs are based on average natural gas prices in the first 2½ months of the preceding quarter, so higher global energy prices in April and May will only be reflected in the third-quarter tariffs starting from July.
MAS and MTI maintained their forecasts made in April that overall and core inflation will average at 1.5 per cent to 2.5 per cent in 2026.
A slower-than-expected resumption of global energy supplies or continued shortages in key intermediate inputs to regional supply chains could further raise imported costs for Singapore, they said, while warning of possible downside risks.
“A stronger-than-expected tightening in global financial conditions could lead to a slowdown in economic activity and thus lower inflation.”
