April’s surprise dip in core prices offers brief relief before higher oil, electricity and food costs bite.

Singapore’s core inflation unexpectedly slowed in April, but policymakers and analysts warn that higher global energy and fertiliser prices are still likely to push up electricity, transport and food costs later in 2026.

Core Inflation Surprises On The Downside
Core inflation, which strips out private transport and accommodation, eased to 1.4 per cent in April from 1.7 per cent in March, defying economists polled by Bloomberg who had expected a rise to 1.8 per cent. MAS and MTI said the decline was driven mainly by lower services as well as retail and other goods inflation. Overall inflation held steady at 1.8 per cent, as higher private transport and accommodation costs were offset by the softer core reading. Authorities cautioned that “periodic Covid-19-like waves” are not the issue this time; instead, typical ups and downs in an endemic environment and cost pass-through dynamics are at play.

Energy Costs Begin To Filter Through
Outside the core basket, private transport inflation jumped from 6.6 per cent in March to 8.1 per cent in April, reflecting higher petrol and car prices. Electricity and gas prices still fell year on year, but at a slower pace of 3 per cent in April versus 4.3 per cent in March, as the decline in electricity prices moderated. MAS and MTI noted that the regulated electricity tariff for each quarter is set using average natural gas prices in the first 2½ months of the preceding quarter. This means the spike in global energy prices over April–May will only show up in tariffs in the third quarter of 2026, starting July, pointing to upward pressure ahead.

Services And Retail Easing Signal Softer Demand
Market analyst Zavier Wong from eToro called the weaker core print a “mild positive surprise,” largely due to what he sees as one-off factors such as a pullback in health insurance costs and lower telecommunications prices. Services inflation eased to 1.5 per cent in April from 2.1 per cent in March, while retail and other goods inflation slowed to 1.5 per cent from 1.8 per cent on softer water prices. Wong said the declines suggest demand is “softening at the margin,” with households turning more cautious amid uncertainty, though he warned that higher oil and input costs from disruptions in the Strait of Hormuz will take time to flow through global supply chains into Singapore’s import prices.

Food Still Tame, But Fertiliser Shock Ahead
Food inflation held at 1.6 per cent in April, as both non-cooked food and food services rose at similar rates to March. DBS senior economist Chua Han Teng described food inflation as “tame” for now but warned that higher fertiliser costs driven by Middle East supply shocks could raise agricultural prices later in the year. Lower crop yields could then lift global food prices and feed into Singapore’s food inflation. Accommodation inflation nudged up from 0.3 per cent to 0.4 per cent, reflecting slightly faster rent increases, adding a modest domestic element to the broader cost picture.

Outlook: One Soft Print, Many Unknowns
Wong sees a “credible path” to some relief in imported costs in the second half of 2026, with oil prices retreating from recent highs and US–Iran peace talks showing progress. But he cautioned that “there has sometimes been a gap between what is being said and the actual outcome,” and that markets have been caught off guard before. MAS and MTI left their April forecasts unchanged, expecting both overall and core inflation to average 1.5 to 2.5 per cent in 2026. They flagged that domestic consumer spending could turn more cautious as uncertainty rises, while nominal wage growth is likely to ease from 2025’s firm levels, potentially tempering demand-side price pressures even as imported costs rise.

April’s softer core inflation reading offers Singapore temporary breathing space, but the underlying drivers – delayed energy pass-through and looming fertiliser-driven food costs – suggest the battle against imported inflation is far from over. For Indonesians and Singaporeans, the data underline how geopolitics and supply chains can quickly reshape living costs, and why policymakers must balance support for households with maintaining confidence that medium-term price stability remains on track.

Sources: Straits Times (2026)

Keywords: April 2026 Inflation, NB 1 8 1 Outlook, Zavier Wong eToro, Chua Han Teng DBS, Electricity Tariff Lag, Food Price Risks