Singapore’s core inflation rate stayed steady at 1.4% in May, reflecting a balance between rising costs in food, retail, and transport, and decreasing prices in services. The Monetary Authority of Singapore and Ministry of Trade and Industry highlight that while higher global energy prices may increase import costs later, cautious consumer spending and slower wage rises should help keep inflation pressures moderate.
- Core inflation remains steady at 1.4% for the second consecutive month
- Higher food, retail, and transport prices offset by lower services costs
- Energy prices pose inflation risks; cautious spending could ease pressure
What happened
Singapore's core inflation, which excludes accommodation and private transport, held steady at 1.4% in May, slightly below analysts’ forecasts. The overall Consumer Price Index for all items also remained stable at 1.8%. This balance was achieved despite increases in food prices, retail goods, and private transport costs, which were largely offset by a continued decline in inflation for services such as telecommunication.
Specifically, food inflation edged up to 1.8% from 1.6% the previous month, while private transport inflation increased to 8.6%. Meanwhile, services costs fell due to drops in telecommunication and other service prices. Energy-related inflation for electricity and gas stayed steady at -3%, reflecting ongoing price reductions in this sector. These mixed shifts contributed to a steady overall inflation picture for Singapore.
Why it feels good
The steady inflation rate provides a sense of economic stability for consumers and businesses alike, especially in a climate where global energy prices remain higher than in previous years. Consumers are reassured that rising costs in essential areas like food and transport have been counterbalanced by easing expenses in other sectors like services, helping everyday budgets stretch further than expected.
Additionally, slower wage growth is moderating wage-related inflation, while cautious domestic spending amid economic uncertainties is keeping demand-led price pressures in check. This balanced inflation environment reduces the risk of sudden price shocks, helping maintain Singapore’s economic resilience at a time of shifting global market conditions.
What to enjoy or watch next
Looking ahead, it’s important to monitor global energy prices, as they are expected to influence the cost of imported goods and services in Singapore over time. Any disruptions or slower-than-expected improvements in energy supplies could raise production and transportation costs, posing upside risks to inflation. Conversely, tighter global financial conditions could cool economic activity and ease inflation pressures.
For residents and policymakers, the coming months will be about balancing these external influences with domestic factors. Keeping an eye on consumer spending patterns, wage changes, and the evolving prices within key sectors such as food, retail, and accommodation will be essential in understanding the inflation trajectory through the rest of 2026.