Inflation Snapshot: Stability Despite Services Pressure

Singapore’s inflation data for November showed continued price stability, with both headline and core inflation holding steady at 1.2%. The reading came in below market expectations of 1.3%, reinforcing the city-state’s position as one of the lowest-inflation developed economies.

The composition of inflation reveals opposing forces. On one hand, services inflation accelerated to 1.9%, driven mainly by higher point-to-point transport costs, including taxis, ride-hailing and car-pooling services, as well as rising health insurance premiums. These categories are closely tied to labor costs and domestic demand, suggesting resilient consumer activity.

On the other hand, these pressures were largely offset by falling electricity prices and slower inflation in retail goods. Prices for clothing, footwear and personal-care appliances declined, easing overall price growth and keeping inflation contained.

Forward Outlook: Low Inflation, Strong Growth

According to the Monetary Authority of Singapore (MAS), core inflation is expected to average around 0.5% in 2025, before gradually rising to a range of 0.5%–1.5% in 2026. Headline inflation is forecast to remain similarly subdued, averaging 0.5%–1.0% in 2025.

MAS noted that external risks remain. Supply-side shocks, particularly those linked to geopolitical developments, could cause sudden increases in imported costs. At the same time, a sharper-than-expected slowdown in global demand could keep inflation lower for longer.

Importantly, the inflation data comes against the backdrop of stronger-than-expected economic momentum. Singapore’s non-oil domestic exports surged 11.6% year over year in November, far exceeding expectations, while GDP expanded by 4.2% in the third quarter. Reflecting this resilience, the Ministry of Trade and Industry upgraded its full-year growth forecast to around 4%, a notable shift from earlier warnings that zero growth was possible.

Implications for Markets and Policy

The combination of low inflation and solid growth gives Singapore’s central bank considerable policy flexibility. After holding monetary policy steady in its last two meetings, there appears to be no immediate pressure for further tightening, nor a strong case for rapid easing.

For investors, Singapore continues to stand out as a stable macro environment, characterized by contained inflation, robust export performance and disciplined policy management — an attractive mix amid ongoing global uncertainty.