Singapore’s inflation rate reached 1.8% in April, falling short of economists’ forecasts of 2%. The moderation was primarily due to slower price increases in services, retail, and other goods. Core inflation, which excludes accommodation and private transport costs, registered at 1.4%, beneath the expected 1.7%.
Meanwhile, the Monetary Authority of Singapore cautioned that imported cost pressures are poised to intensify and spread more widely across goods and services in the coming months. Escalating energy prices and other input costs originating from recent events in the Middle East are likely to drive up both production and transport expenses for imported products.
In other economic data, Singapore revised its first-quarter gross domestic product growth upward to an annualised 6%, considerably above the initial estimate of 4.6% and analyst expectations of 5.1%.
This stronger performance was fueled by robust wholesale trade, manufacturing, and finance and insurance sectors, bolstered by solid demand in artificial intelligence-related markets. Seasonally adjusted, GDP rose 1.0% quarter-on-quarter, reversing an advance estimate of a 0.3% contraction.
Despite these gains, officials acknowledged that Singapore’s economic outlook for 2026 has dimmed since earlier in the year, citing the impact of the Middle East conflict on global inflation and supply chains.
The Ministry of Trade and Industry maintained its full-year growth projection at 2% to 4%, indicating that downside risks had increased and pledged ongoing monitoring and adjustments as needed.
Notably, the Monetary Authority of Singapore tightened its monetary policy in April for the first time in approximately three years in response to inflation concerns stemming from geopolitical tensions.
Unlike most central banks, Singapore operates its policy by managing the value of its currency within an unspecified band linked to a basket of trading partner currencies, rather than controlling domestic interest rates.
The central bank described its current policy position as appropriate under prevailing conditions and expects local interest rates to remain largely stable, contingent on U.S. monetary policy developments.
