RHB Bank’s latest Global Economics and Market Strategy Report, authored by Barnabas Gan, Group Chief Economist and Head of Market Research, reveals that Singapore’s inflation remains subdued, prompting the bank to maintain its full-year headline and core inflation forecasts at 1.2% and 0.9%, respectively, for 2025. The report anticipates that the Monetary Authority of Singapore (MAS) will likely keep its policy parameters unchanged in the upcoming October review, although there is a possibility of adjustments to the Singapore dollar nominal effective exchange rate (S$NEER) slope and band width.
In July 2025, Singapore’s headline Consumer Price Index (CPI) slowed to 0.6% year-on-year, down from 0.8% in June, falling short of RHB’s and Bloomberg’s estimates of 0.8%. Core inflation also edged lower to 0.5% year-on-year from 0.6% in June. These figures highlight the benign inflationary environment in Singapore, which supports the bank’s decision to maintain its forecast.
Gan’s report suggests that whilst the MAS is expected to hold its current policy stance, there remains a possibility for the S$NEER slope to flatten or the band’s width to widen from the current perceived +/- 2.0%. This cautious approach reflects the ongoing monitoring of economic conditions and inflationary pressures.
As Singapore navigates through the rest of 2025, the subdued inflation rates provide a stable backdrop for economic planning and policy adjustments. The upcoming MAS policy review in October will be closely watched for any potential changes in response to evolving economic indicators.
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