Shoppers browse vegetables at a wet market in Singapore on Wednesday, December 22, 2021.
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Singapore’s inflation rate was steady at 1.8% in May, lower than economists expected as lower prices for telecommunications services offset higher costs for private transport, accommodation, retail and food.
The figure was below the 2% forecast by economists polled by Reuters and unchanged from the 1.8% recorded in April.
Rising prices of cars and motorcycles accelerated inflation in private transportation.
Core inflation, which excludes accommodation and private transportation costs, came in at 1.4%, compared to the expected 1.6%.
Energy prices have eased recently but remain elevated compared to 2025 levels, the Monetary Authority of Singapore said in a statement.
“Over time, production and transportation costs for a wide range of Singapore’s imported goods and services are expected to rise as rising energy costs lag and pass through global supply chains,” the central bank wrote.
It also said that the pace of rise in labor costs in the service sector is likely to slow this year as nominal wage growth slows, adding that domestic consumer spending may become more cautious amid economic uncertainty.
The data also comes after Singapore’s central bank tightened monetary policy in April for the first time since April 2022, citing inflation risks stemming from conflicts in the Middle East.
Unlike most central banks, MAS manages monetary policy through exchange rates rather than interest rates. This allows the Singapore dollar to move within an undisclosed policy band against a basket of currencies from its major trading partners.
In its April policy review, MAS raised its forecast for this year’s core and headline inflation rates from 1% to 2% to 1.5% to 2.5%.
The inflation report was released following stronger-than-expected economic growth in the first quarter. Gross domestic product (GDP) rose 6% in the first quarter from a year earlier, beating the 5.1% growth expected in a Reuters poll.
The Ministry of International Trade and Industry left its GDP growth forecast for 2026 unchanged at 2-4%, although it warned that “downside risks have increased significantly as a result of the U.S.-Israel-Iran conflict.”
