Singapore’s headline Consumer Price Index (CPI) increased by 0.5% month-on-month in March, reflecting the direct impact of surging energy prices, according to a report by UOB Global Economics and Markets Research. The rise in energy costs, particularly Brent crude oil prices, which surged over 40% in March, significantly influenced petrol prices, leading to a 16.4% month-on-month increase. This contributed to a year-on-year headline CPI rise of 1.8%, aligning with Bloomberg’s consensus but slightly below UOB’s projection of 1.9%.
The core CPI, which excludes private transport and accommodation costs, saw a more modest increase of 0.1% month-on-month. Key components such as food and healthcare showed little to no sequential growth. However, land transport services rose by 2.3% month-on-month, driven by a 6.7% increase in point-to-point transport costs as private hire companies temporarily raised fares due to rising fuel prices.
The Monetary Authority of Singapore (MAS) maintained its 2026 inflation forecast range at 1.5–2.5%, citing potential upside risks due to imported cost pressures. The outlook remains cautious, with domestic consumer spending potentially affected by economic uncertainties and supply chain disruptions.
UOB’s report highlights that whilst first-round effects of the energy supply shock are evident, it is premature to assess second-round effects. The bank expects core inflation to strengthen from June 2026, peaking at 2.5% in August-September, before moderating towards 2.0% by the end of the year. MAS is anticipated to tighten monetary policy further in October, with potential earlier action if inflation expectations accelerate.
