Tame CPI pressures expected for Singapore in 2025: RHB

April saw a slight uptick in core inflation driven by firmer prices.

RHB expects consumer price pressures in Singapore to remain subdued in 2025, maintaining its forecast for headline inflation at 1.6% year-on-year and core inflation at 1.1%.

Despite a slight uptick in April’s core inflation to 0.7%, up from 0.5% in March, price growth remains well below the levels seen in 2024, supporting the view that inflation is unlikely to reaccelerate meaningfully in the near term.

The April data marked the first rise in core inflation after six consecutive months of easing, driven by higher costs in food and services. However, RHB emphasised that overall inflation conditions remain muted, with year-to-date core inflation averaging just 0.6% and headline inflation at 1%. Prices in categories such as electricity, gas, and retail goods continued to fall.

RHB attributes the restrained inflation outlook to softening global demand, easing commodity prices, and a strong Singapore dollar that has outperformed regional peers.

Whilst the temporary suspension of US-China tariffs may reduce trade friction for now, broader global economic weakness is expected to cap price pressures by dampening external demand. This in turn could limit cost pass-through for businesses, especially if Singapore’s export-driven economy slows further in the second half of 2025.

The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry have both reaffirmed their inflation projections to average between 0.5% and 1.5% for the year.

RHB believes the MAS is likely to keep its current policy stance unchanged in the near term, with the strong Singapore dollar already helping to contain imported inflation.

The central bank may, however, consider policy adjustments if economic conditions worsen, including a possible widening of the exchange rate band.