Singapore Inflation Ends 2025 at Yearly High

Singapore's core inflation remained at its highest level for the year in December, according to official data released on January 23, signaling potential price pressures heading into 2026.

While the month-end figure was elevated, inflation over the full year of 2025 showed a significant cooling trend. The joint report from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) provides a detailed look at the nation's price dynamics.

Full-Year 2025 Inflation Review

For 2025 as a whole, core inflation averaged 0.7%, a sharp decline from the 2.8% recorded in 2024. This core metric, which excludes private transport and accommodation costs, is a key indicator of household expenses. The final figure, however, was slightly higher than the official forecast of around 0.5%.

Similarly, overall inflation for 2025 averaged 0.9%, falling from 2.4% the previous year.

A Closer Look at December's Numbers

In December, both core and overall inflation registered at 1.2%, figures that were unchanged from November. This level marks the highest core inflation reading since December 2024.

Several key categories influenced the December data:

• Private Transport: Inflation in this sector accelerated to 3.7% from 3.5% in November, primarily due to a smaller decline in petrol prices.

• Utilities: Electricity and gas prices fell by 4.2%, a slightly faster drop than the 4.1% seen in November, driven by a larger fall in electricity costs.

• Retail Goods: Prices for retail and other goods were flat in December after a 0.3% rise in November. Higher prices for alcoholic beverages and tobacco were offset by lower costs for personal effects and furniture.

• Stable Categories: Inflation for food, services, and accommodation showed no change from the previous month.

Outlook for 2026: A Projected Rise in Inflation

Looking ahead, MAS and MTI project that both core and overall inflation will rise in 2026. This forecast is based on several domestic and external factors.

On the international front, imported costs are expected to continue declining, but at a slower pace. While global crude oil prices are forecast to fall, regional inflation is anticipated to pick up modestly.

Domestically, unit labor costs are expected to increase as productivity growth normalizes. At the same time, private consumption demand is likely to remain steady, supporting price levels.

The official report noted that the inflation outlook remains subject to uncertainties. MAS and MTI did not reiterate their previous 2026 forecast for inflation to fall between 0.5% and 1.5%. An updated forecast will be provided in the upcoming monetary policy statement on January 29.