Core inflation forecast revised down on muted price pressures

Analysts expect core inflation to fall between 0.6%–0.9% for 2025.

Singapore’s full-year core inflation is now expected to come at less than 1% in 2025, according to analysts.

RHB Singapore downgraded its core inflation forecast to 0.9% for the whole of 2025, from 1.1% previously.

Nomura Asia maintained its full-year core inflation forecast of 0.7%.

“We think the inflation outlook remains benign, given muted underlying price pressures and still-broad sources of disinflation as discussed above, consistent with near-neutral labour market conditions,” Nomura Asia analysts Euben Paracuelles and Charnon Boonnuch wrote in a report on 23 July 2025.

The Monetary Authority of Singapore (MAS) is expected to narrow its 2025 core inflation forecast range to 0.5%–1%, from 0.5%–1.5% previously, Nomura Asia said.

UOB Global Economics and Markets Research forecasts an average core inflation of 0.6% in 2025, downgrading from a previous forecast of 0.8%.

For 2026, UOB forecasts core inflation to be 1.1%, down from its previous forecast of 1.3%.

Josh Gilbert, market analyst at eToro, echoed the same sentiment. “With growth still sluggish and inflation now well contained, it will be harder for MAS to justify holding policy steady, and today’s data strengthens that argument,” Gilbert said.

“The door is now wide open for MAS to shift gears and step in to support growth. This doesn’t greenlight reckless easing, of course. Global risks, such as a potential spike in oil prices and tariffs, still loom. But at this point, holding policy too tight for too long could do more harm than good to the economy,” he added.