Singapore’s inflation rate in March remained at a four-year low, with the consumer price index (CPI) climbing by just 0.9% year-on-year. The city-state’s monetary authority attributed this modest increase mainly to rising costs in food and private transport.
While March inflation remained steady compared to February’s 0.9%, it was lower than the 1.1% predicted in a Reuters poll. On a month-on-month basis, CPI actually declined by 0.1% in March, reflecting a slight dip in overall prices.
Core Inflation Slows Amid Lower Costs
Core inflation, which excludes volatile components such as private transport and accommodation, slowed further to 0.5% in March, down from February’s 0.6%. This decline was primarily due to lower inflation across a broad range of core CPI categories, with the exception of food costs.
The inflation figures come at a critical time for Singapore as the country prepares for a general election on May 3. As political campaigning ramps up, Prime Minister Lawrence Wong acknowledged that the rising cost of living is a major concern for Singaporeans. He linked the pressures to global events, such as the ongoing wars in Europe and the Middle East, as well as disruptions in global supply chains and the ongoing trade wars.
Economic Outlook Amid Global Uncertainties
Singapore’s economy faces significant uncertainty, with recent data pointing to zero growth as a potential outcome for the year. In the first quarter of 2025, GDP growth was lower than expected, coming in at just 3.8%, well below the 4.3% economists had predicted. The Ministry of Trade and Industry (MTI) revised its GDP growth forecast for 2025 to between 0% and 2%, down from the previous 1% to 3% range. The slowdown is attributed to declines in manufacturing and specific service sectors such as finance and insurance.
Policy Adjustments and Future Prospects
In response to the economic slowdown and subdued growth, Singapore’s Monetary Authority (MAS) eased its monetary policy earlier in April for the second time. The MAS’ decision provides more room for the government to support economic activity and boost growth in the face of mounting external pressures.
As Singapore navigates these economic challenges, policymakers are closely monitoring inflation trends and the broader global economic landscape. The combination of trade tensions, supply chain issues, and geopolitical instability makes the path forward uncertain, but efforts to stimulate domestic growth are likely to continue.
As the country heads toward its upcoming general election, the economy and cost-of-living concerns will likely remain at the forefront of public debate.