JAKARTA - Singapore's inflation remained at 1.8 percent in May. This figure is lower than market expectations and shows that price pressures are still under control.
As reported by CNBC, citing Tuesday, June 23, May inflation was unchanged from April. The figure was also below the 2 percent forecast of economists surveyed by Reuters.
Singapore government data shows that the cost of personal transportation, housing, retail, and food is the main contributor to inflation. However, the increase was held back by a decline in telecommunications services.
The increase in the price of cars and motorcycles is the main factor that drives personal transportation inflation.
Core inflation, which is inflation that does not include housing and personal transportation costs, was recorded at 1.4 percent. This figure is lower than the estimated 1.6 percent.
According to a report by CNBC citing the Monetary Authority of Singapore or MAS, energy prices have indeed eased recently. However, the level is still higher than 2025.
MAS estimates that higher energy costs will spread to the global supply chain. The impact could be felt on the cost of production and transportation of goods and imported services in Singapore.
The Singapore central bank also expects the cost of labor in the services sector to rise more slowly this year. The reason is that nominal wage growth has begun to slow.
On the other hand, domestic consumer spending is expected to be more cautious due to economic uncertainty.
This inflation data comes after MAS tightened monetary policy in April. It was the first tightening since April 2022. The move was taken due to the risk of inflation from the conflict in the Middle East.
Unlike many other central banks that regulate interest rates, MAS manages monetary policy through the Singapore dollar exchange rate. The currency is allowed to move within a certain range against a basket of major trading partners' currencies.
In its April policy review, MAS raised its core and headline inflation projections this year to 1.5 percent to 2.5 percent. Previously, the projections were in the range of 1 percent to 2 percent.
This inflation report comes after Singapore's economy grew stronger than expected in the first quarter. Singapore's gross domestic product rose 6 percent compared to the same period a year earlier. The figure exceeded Reuters' forecast of 5.1 percent.
The Singapore Ministry of Trade and Industry has maintained its 2026 economic growth projection in the range of 2 percent to 4 percent.
However, the government warned that the risk of slowing down significantly due to the conflict between the United States, Israel, and Iran.
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