SINGAPORE: Inflation is expected to “ease progressively” over 2027 in line with global energy prices, but a prolonged disruption to energy supplies risks driving up inflation and stifling economic growth here, the Monetary Authority of Singapore (MAS) said in its latest quarterly macroeconomic review on Tuesday (Apr 14).
“The trajectory of inflation beyond 2026 will depend heavily on global energy and food prices, as well as growth developments,” said MAS, noting that even if supplies from the Middle East resume, global oil prices are expected to remain elevated for some time.
Prices are already starting to tick up in Singapore and MAS said inflation should eventually peak and decline, in line with the projected moderation in global energy prices. But the risks to the inflation outlook are tilted to the upside, said the central bank.
“A prolonged disruption to global energy supplies or the unexpected implementation of export controls would lead to even higher import costs for Singapore, and pose upside risks to inflation alongside downside risks to growth,” the report said.
Household real incomes, which take inflation into account, are likely to be eroded as higher prices of imports feed into domestically produced goods and services. That could then dampen aggregate demand.
