Core inflation seen at 2% or slightly higher in Q3: Maybank

Bank keeps its 2026 forecast at 1.7% as imported cost pressures persist. 

Singapore’s core inflation is expected to remain at or slightly above 2% in the third quarter as higher energy, logistics, and imported input costs continue to feed through to prices, before easing in the final three months, according to a Maybank report. 

The bank maintained its core and headline inflation forecasts at 1.7% for 2026 and 1.6% for 2027. 

It expects the rate to remain within the Monetary Authority of Singapore’s forecast range, which tops out at 2.5%.

The projections come as core inflation rose to a 21-month high of 2% in July from 1.6% in June, driven by higher electricity and gas prices, as well as services and food costs.

Maybank said some of the cost increases linked to the Gulf War have yet to fully pass through to consumer prices.

Moreover, imported food prices could also face upward pressure from extreme heat and agricultural disruptions related to El Niño.

However, the bank expects the roughly 0.6% year-to-date appreciation of the Singapore dollar nominal effective exchange rate through end-July to help contain imported inflation.

Domestic cost pressures are expected to remain modest due to a softer labour market, economic uncertainty, and capital-intensive growth.