\n<\/p>\n
The authorities said that imported cost pressures are expected to remain firm for Singapore in the near term.<\/p>\n
\u201cEnergy commodity prices have risen anew and are projected to remain high in the near term,\u201d said MAS and METI.<\/p>\n
\u201cGlobal and regional food prices are also expected to pick up as costlier inputs and adverse weather patterns affect food production.\u201d<\/p>\n
But imported inflation should ease over 2027 as the effects of temporary supply disruptions fade, the authorities added.<\/p>\n
On the domestic front,\u00a0price pressures are likely to stay subdued, with unit labour costs in the services sector expected to remain contained amid continued productivity gains, MAS and METI said.<\/p>\n
Enhanced government subsidies, such as for healthcare and education, will also dampen services inflation, the authorities added.<\/p>\n
Taking into account these factors, core inflation and overall inflation are expected to remain slightly elevated in the immediate quarters ahead before easing more discernibly from mid-2027.<\/p>\n
Core inflation is expected to average 1.5 per cent to 2 per cent in 2026, in line with MAS’ full-year forecast range. It is also expected to average 1.5 per cent to 2.5 per cent in 2027.<\/p>\n
Overall inflation is expected at around 2 per cent in 2026 and 1.5 per cent to 2.5 per cent in 2027.<\/p>\n
\u201cThe risks to inflation remain tilted to the upside. A sharp and sustained surge in global energy or food prices could lift Singapore\u2019s import costs by more than projected,\u201d MAS and METI said.<\/p>\n
Domestic inflation could also stay elevated if spillovers from the artificial intelligence-related boom broaden and unit labour costs rise more rapidly, the authorities added.<\/p>\n
\u201cHowever, higher-than-expected global interest rates or a pullback in AI-related investment could exert a drag on growth, and thus, inflation,\u201d MAS and METI said.<\/p>\n
\u201cEnergy production and shipments from the Middle East could also recover more quickly than projected, resulting in a greater decline in energy prices.\u201d<\/p>\n<\/div>\n
\n