Singapore’s core inflation rate slightly decreased by 0.1% month-on-month in June, maintaining a year-on-year rate of 0.6%, according to UOB Global Economics and Markets Research. This figure was below both Bloomberg’s consensus and UOB’s own forecast. The subdued inflation is attributed to declines in sectors such as recreation, sport and culture, and information and communication, with food inflation also easing.
The Monetary Authority of Singapore (MAS) is anticipated to consider further easing measures, as inflation risks remain high due to external uncertainties. The recent spike in global crude oil prices, driven by geopolitical tensions, is seen as temporary, with prices normalising following de-escalation. Despite this, MAS may maintain its cautious stance, potentially deferring policy easing to October 2025.
UOB has adjusted its average core inflation forecast for 2025 to 0.6%, down from 0.8%, and for 2026 to 1.1%, down from 1.3%. The report suggests that MAS could adopt a “wait-and-see” approach, with further easing likely a matter of timing rather than necessity. MAS Managing Director Chia Der Jiun noted that the impact of tariffs and uncertainties has yet to significantly affect the economy, allowing room for adjustments if growth risks intensify.
The upcoming MAS Monetary Policy Statement, expected on 30 July, will provide further insights into the central bank’s approach amid these economic conditions.
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