Singapore's core inflation held steady at 1.8% in May, as higher costs for food, retail goods, and private transport were balanced by a slowdown in services inflation. The Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) noted that while energy prices have eased from peaks, they remain elevated and could push up imported costs over time. Core and overall inflation are projected to average between 1.5% and 2.5% in 2026. The authorities highlighted upside risks from potential supply chain disruptions and downside risks from tighter global financial conditions. Services inflation fell to 1.3% in May, while food inflation rose to 1.8% and private transport inflation climbed to 8.6%.
Singapore's core inflation rate remained unchanged at 1.8% in May compared to April, according to a joint media release from the Monetary Authority of Singapore ( MAS) and the Ministry of Trade and Industry ( MTI).
The figure reflects a balancing act where price increases in several categories were offset by a deceleration in services inflation. The data, released on Tuesday, June 23, indicates that inflationary pressures remain contained but with notable nuances across different sectors. Higher inflation was observed in private transport, accommodation, food, and retail and other goods.
However, these increases were largely neutralized by a decline in services inflation. Services inflation fell from 1.5% in April to 1.3% in May, primarily due to a steeper drop in telecommunication services prices. Electricity and gas inflation remained at -3%, with electricity prices falling at a similar pace in both months. Retail and other goods inflation edged up slightly from 1.5% to 1.6%, driven by faster price increases for appliances for personal care and information and communication equipment.
Accommodation inflation rose marginally from 0.4% to 0.5% due to a larger increase in housing rents. Food inflation increased from 1.6% to 1.8% as prices for non-cooked food and food services rose at a faster pace. Private transport inflation saw the most significant jump, climbing from 8.1% to 8.6% due to higher increases in car and motorcycle prices. MAS and MTI noted that global energy prices have recently eased but remain elevated compared to 2025 levels.
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. On the domestic front, services unit labour costs are likely to increase at a slower pace this year as nominal wage growth eases from the firm levels seen last year.
However, domestic consumer spending could become more cautious amid economic uncertainty. Taking these factors into account, core inflation and overall inflation are projected to average between 1.5% and 2.5% in 2026, which is in line with the previous forecast. The authorities emphasized that at this juncture, the risks to the inflation outlook remain tilted to the upside.
A slower-than-expected resumption in global energy supplies or continued shortages in key intermediate inputs to regional supply chains could further raise imported costs for Singapore. Conversely, downside risks are also present; a stronger-than-anticipated tightening in global financial conditions could lead to a slowdown in economic activity and thus lower inflation
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