Singapore’s core inflation up again, rises to 1.7% in March

“On the domestic front, services unit labour costs are likely to grow at a slower pace this year as nominal wage growth eases from the firm levels last year. Meanwhile, domestic consumer spending could turn more cautious amid rising economic uncertainty,” said the authorities.

MAS and MTI noted that core and overall inflation are currently projected to average 1.5-2.5 per cent in 2026, adding that the risks to the inflation outlook are “tilted to the upside”.

“A more persistent disruption to global energy supplies or shortages in key intermediate inputs to regional supply chains could further raise imported costs for Singapore,” said the authorities.

“However, downside risks are also present. A curtailment of industrial production due to supply chain disruptions or an abrupt tightening in global financial conditions could lead to a slowdown in economic activity and thus lower inflation.”