Singapore's inflation rate remained unchanged at 1.8% in May, coming in below economists' expectations of 2%. According to latest data from Investing.com, the latest reading matched April's figure and showed a mixed trend in prices across different sectors of the economy. Core inflation, which excludes accommodation and private transport costs, also stayed steady at 1.4% in May, lower than the 1.6% forecast by economists surveyed by Reuters. On a monthly basis, consumer prices rose 0.7% in May, reversing a 0.3% decline in the previous month, as reported by Investing.com.
As reported by Investing.com, higher food prices as well as increases in retail and other goods costs were largely offset by lower services inflation. Services inflation eased to 1.3% in May from 1.5% in April, largely due to a steeper decline in telecommunication services prices. Food inflation accelerated to 1.8% from 1.6%, while accommodation inflation rose to 0.5% from 0.4%. Private transport inflation also picked up to 8.6% from 8.1% in the previous month, according to Investing.com. Government data showed that private transport inflation was driven by higher prices for cars and motorcycles, while accommodation costs also rose, contributing to the overall increase in consumer prices.
While inflation remained relatively subdued, Singapore's central bank cautioned that rising energy costs could push up prices in the coming months. According to The Financial Express, the MAS said energy prices have eased recently but are still higher than levels seen in 2025. The central bank warned that 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. The MAS also noted that wage growth is expected to slow this year, which could help limit increases in service-sector costs, while households may become more cautious with spending because of ongoing economic uncertainty.
The inflation figures come after the MAS tightened monetary policy in April, citing inflation risks linked to the conflict in the Middle East. Latest data from Reuters shows that the central bank's June quarter survey of economists showed core inflation is seen at 2% this year and headline inflation at 2.3%, up from forecasts of 1.5% for both in the previous survey. As reported by Investing.com, MAS and the Ministry of Trade and Industry said both core inflation and headline inflation are still expected to average between 1.5% and 2.5% in 2026, although risks to the outlook remain tilted to the upside due to elevated global energy prices and potential supply-chain disruptions. The inflation data comes ahead of the central bank's next monetary policy review in July, where policymakers are widely expected to leave policy settings unchanged while assessing the outlook for domestic demand and imported inflation pressures.
The inflation report follows stronger-than-expected economic growth in Singapore during the first quarter, with the country's economy expanding 6% from a year earlier, surpassing the 5.1% growth forecast in a Reuters poll. According to The Financial Express, though they had a solid start to the year, the Ministry of Trade and Industry maintained its full-year GDP growth forecast of 2% to 4%, but warned that downside risks have risen significantly as a result of the U.S.-Israel-Iran conflict.
