Singapore's inflation rate remained steady at 1.2% in November, falling short of estimates. This figure, however, masks a complex interplay of factors. While higher service prices, particularly in point-to-point transport and health insurance, contributed to inflation, a steeper decline in electricity costs acted as a counterbalance. Core inflation, which excludes private transport and accommodation prices, also came in at 1.2%, slightly lower than expected. Despite this, the overall inflation rate remained unchanged. The Monetary Authority of Singapore (MAS) has maintained its monetary policy, after easing it in January and April due to global economic threats. However, the outlook for 2025 and 2026 is cautiously optimistic. Core inflation is forecast to be around 0.5% in 2025, before rising to 0.5%-1.5% in 2026. Headline inflation is expected to average 0.5%-1.0% in 2025 and 0.5%-1.5% in 2026. This optimism is underpinned by strong manufacturing and export demand, with Singapore's economy growing at 4.2% in the third quarter, surpassing expectations. However, supply shocks, including those stemming from geopolitical developments, could abruptly increase imported costs and potentially keep core inflation lower for longer. This delicate balance of factors makes Singapore's economic outlook both promising and uncertain.
