Core Inflation Holds Steady at 1.2% in Singapore for November

Singapore’s core inflation remained stable at 1.2% year-on-year in November 2023, as reported by the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS). This figure, unchanged from October, reflects a balance between rising service costs and a decline in retail prices along with a notable drop in electricity and gas costs.

Despite the stability, the November core inflation rate was lower than the median forecast of 1.3%, according to a Reuters poll of economists. On a month-to-month basis, core prices, which exclude accommodation and private transport, decreased by 0.1%.

Overall inflation, measured by the Consumer Price Index-All Items (CPI-All Items), also remained at 1.2% in November. This was primarily due to unchanged accommodation and core inflation rates. However, on a monthly basis, overall inflation, which excludes non-consumption expenditures such as housing and financial assets, increased by 0.2%.

Sector Breakdown of Inflation Rates

According to the latest data, services inflation edged up to 1.9% in November from 1.8% in October. This increase was driven by higher costs in point-to-point transport services and health insurance. In contrast, prices for electricity and gas saw a sharper decline in November, largely due to reduced electricity costs.

Food inflation remained steady at 1.2%, with prices in food services and non-cooked foods increasing at a consistent rate. Retail and other goods inflation saw a slight dip, falling to 0.3% in November from 0.4% the previous month, as prices for clothing, footwear, and personal care appliances declined. Additionally, private transport inflation eased to 3.5% from 3.8% due to a smaller increase in car prices, while accommodation inflation held steady at 0.3%.

Future Inflation Projections

Looking ahead, MAS and MTI have maintained their previous outlook, indicating that Singapore’s imported costs are expected to decline, albeit at a slower pace. They anticipate that global crude oil prices will experience a gradual decrease in 2026 compared to 2025. Regional inflation is also projected to rise modestly following this year’s weaker performance.

“On the domestic front, administrative factors that are currently suppressing inflation are likely to continue diminishing over the coming quarters,” stated MAS and MTI officials. They further noted that growth in unit labour costs should increase as productivity normalizes, while private consumption demand is expected to remain steady.

Reflecting these expectations, core inflation is forecasted to be around 0.5% in 2025, with projections ranging between 0.5% and 1.5% in 2026. Overall inflation is anticipated to average 0.5% to 1% in 2025 and 0.5% to 1.5% in 2026.

MAS and MTI cautioned that the inflation outlook remains uncertain, as supply shocks, particularly those resulting from geopolitical issues, could abruptly increase imported costs. Conversely, a significant decline in global oil prices could also temporarily slow the pace of inflation.