Higher health insurance, food and transport costs push both core and headline inflation above forecasts.

Singapore’s inflation jumped sharply in October, with both core and headline CPI rising to 1.2%, surprising economists and signalling that price pressures may have bottomed out earlier this year.

Core Inflation Surges to 1.2% in October

Core inflation—which excludes accommodation and private transport—rose from 0.4% in September to 1.2% in October, the highest level since December 2024. The jump exceeded private-sector forecasts, with Bloomberg’s economist poll expecting just 0.7%. MAS and MTI attributed the increase to higher prices in services, food, retail goods, and a smaller decline in electricity and gas prices.

Headline Inflation Also Climbs Above Expectations

Headline CPI rose from 0.7% to 1.2%, driven mainly by a sharper increase in private transport costs, including higher car prices. This figure beat Bloomberg’s consensus forecast of 0.9%. On a month-on-month basis, core prices climbed 0.5%, while the all-items CPI remained unchanged.

Economists: Inflation Has “Likely Bottomed”

Analysts say the October spike suggests the inflation trough occurred in Q3 2025, aligning with MAS’ earlier projections. OCBC’s Selina Ling noted that the latest figures explain why MAS paused monetary easing in both July and October. DBS economist Chua Han Teng added that both headline and core inflation remain “contained” under 2%, consistent with price stability alongside better-than-expected economic growth.

Full-Year Forecasts Unchanged Despite Upside Surprise

MAS and MTI maintained their full-year projections:

• 2025 Core inflation: ~0.5%
• 2025 Headline inflation: 0.5%–1%
• 2026 Core & Headline inflation: 0.5%–1.5%

While Barclays slightly raised its 2025 core inflation forecast from 0.6% to 0.7%, its economists said they do not see evidence of a surge in demand-driven price pressures.

Key CPI Categories Driving October’s Increase

Several major components contributed to the month’s stronger inflation:

• Services: Up sharply to 1.8% (from 0.3%) due to higher health insurance, healthcare services, and holiday expenses.
• Food: Rose to 1.2%, driven by non-cooked food prices.
• Retail & Other Goods: Inched up to 0.4%, reflecting higher clothing, footwear, and personal effects prices.
• Private Transport: Increased to 3.8%, reflecting steeper car price rises.
• Accommodation: Eased slightly to 0.3%, due to slower rental growth.
• Electricity & Gas: Fell 4%, a smaller decline compared to September’s -5.8%.

Outlook: Moderating Imported Costs, Persistent Uncertainties

Authorities expect imported inflation to continue easing but at a slower pace. Global oil prices are forecast to fall more gradually in 2026, while regional inflation may pick up modestly. Domestically, administrative factors that have temporarily dampened inflation are set to taper off, and unit labour costs may rise as productivity normalises.

However, MAS and MTI flagged lingering risks:

• Geopolitical shocks could raise imported prices abruptly.
• Weaker global demand may suppress inflation longer than expected.
• Another oil price slump could temporarily slow price increases.

Monetary Policy: MAS Expected to Stay on Hold Through 2026

Economists widely agree that MAS is unlikely to adjust its policy settings next year. Barclays’ Brian Tan said MAS would only ease further if convinced the output gap turns significantly negative—a scenario looking less likely amid steady consumption and manageable export conditions. DBS echoed this view, forecasting that MAS will “keep the powder dry”, preserving flexibility amid global uncertainty.

Singapore’s October inflation data underscores a turning point, showing that prices may have bottomed while remaining well-contained. For households and businesses across Singapore and the wider region, the figures highlight a delicate balance: easing global pressures on one hand, and rising domestic costs on the other, shaping expectations for 2026’s economic landscape.

Sources: The Business Times (2025) , CNA (2025)

Keywords: Singapore Core Inflation, Headline CPI Singapore, MAS Economic Outlook, October Inflation Data, 2026 Inflation Forecast