Inflation rates in Singapore and Malaysia have shown a notable decline. In March, Singapore’s headline inflation remained stable at 0.9% year on year, slightly below the anticipated 1%. Core inflation in Singapore dropped to 0.5%, marking its lowest level since February 2021. Meanwhile, Malaysia’s consumer price index increased by only 1.4% year on year, the lowest in over four years.
The easing of inflation in Singapore is attributed to reduced price pressures in accommodation and transportation, although a slight rise in food inflation prevented a further drop in headline inflation, according to a recent analysis by Moody’s Analytics.
Falling global commodity prices, particularly Brent crude oil, which recently fell below $65 per barrel, are expected to keep inflation subdued throughout 2025. Moody’s Analytics projects Singapore’s full-year inflation for 2025 to be 0.9%, with core inflation comfortably within the Monetary Authority of Singapore’s target of below 2%.
In Malaysia, the moderation in inflation is largely due to a slowdown in housing and utilities inflation, which has been easing for three consecutive months. However, potential risks remain as the government plans to roll back fuel subsidies and increase electricity tariffs. Unpredictable weather could also impact food inflation. Despite these risks, Moody’s Analytics expects headline inflation in Malaysia to rise in the latter half of 2025.
These developments indicate a positive trend in managing inflationary pressures in both countries, with potential implications for future monetary policy adjustments.
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