(June 23): Singapore’s core inflation rate was unchanged last month, even as the Middle East conflict had pushed up global prices of energy and fertiliser.
Core inflation, which excludes housing and private transportation costs, rose 1.4% in May from a year earlier, according to a statement by the Department of Statistics Singapore on Tuesday. That’s the same pace as April, and slower than the median estimate in a Bloomberg News survey of 1.6%.
The all-items inflation rate came in at 1.8% last month, compared to the 2% forecast. While transport and food inflation accelerated to 7.4% and 1.8%, respectively, housing and utilities remained steady at 0.2%.
The latest inflation numbers suggest Singapore has been relatively insulated from the oil crunch caused by the conflict in the Middle East, easing concerns that higher energy costs could feed through into consumer prices and other parts of the economy.
Risks to the inflation outlook are two sided, the Monetary Authority of Singapore and trade ministry said in a statement. A slower recovery in global energy supplies or continued supply-chain disruptions could raise imported inflation, while a sharper tightening in global financial conditions could weaken demand and damp price pressures, they added.
While the MAS is likely to remain cautious on its inflation outlook, there’s no urgency for the central bank to tighten policy further at its July meeting as oil prices have declined, said Selena Ling, an economist at Oversea-Chinese Banking Corp.
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The MAS in April tightened its policy settings and raised its forecast for core inflation to 1.5%-2.5% this year, from 1%-2% previously.
The risk of another monetary policy tightening has shifted to October instead of July, as policymakers have been surprised by how mild inflation has been, according to Barclays economist Brian Tan. He lowered his 2026 core inflation forecast to 1.6% from 1.7% on softer oil prices.
Economic growth of the city-state in the first quarter came in better than expected at 1% compared with 0.2% forecast in a Bloomberg News survey on exposure to AI through electronic exports and digital services.
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