Singapore inflation climbs at the slowest rate since February 2021

Singapore’s inflation climbed by its lowest rate since February 2021, increasing 1.2% year on year in January, down from a revised 1.5% in December.

This is the first key piece of economic data since Singapore unveiled its 2025 budget on Feb. 18, which promised more support for households and businesses to combat cost of living pressures.

During the budget speech, Prime Minister Lawrence Wong said, “While inflation is expected to ease further this year, prices remain high. Singaporeans are still adjusting to these new price realities.”

The headline inflation figure is a wide miss from the 2.15% rise expected by economists polled by Reuters.

Core inflation in the country — which, strips out prices of private transport and accommodation — rose by 0.8% year on year, down from December’s 1.8% rise and below the 1.5% growth expected.

The figure comes as Singapore in January loosened its monetary policy for the first time since 2020, citing a faster than expected decline in inflation and potential for a growth slowdown.

The Monetary Authority of Singapore said inflation will remain below 2% this year, “reflecting the return to low and stable underlying price pressures in the economy.”

Headline inflation is forecast to average 1.5%–2.5% in 2025, compared to 2.4% in 2024. MAS also downgraded its forecasts for the core inflation rate to an average of 1%–2% in 2025.

After the data release, the Singapore dollar strengthened 0.16%, trading at 1.3334 against the greenback. Earlier in the day, it had appreciated as much as 1.3307 against the U.S. dollar, marking its strongest level since November.

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