The Merlion statue in the central business district of Singapore, on Tuesday, July 8, 2025.
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Singapore’s headline inflation rate remained steady at 0.8% in June, staying at its lowest level in over four years.
The inflation figure was lower than the 0.9% expected by economists, and comes ahead of the country’s monetary policy decision later in July.
Core inflation, which strips out prices of private transport and accommodation, remained unchanged at 0.6%.
The soft inflation figure clears the way for Singapore’s monetary authority to ease its monetary policy to support growth in an uncertain trade environment.
In its recent annual report released on July 15, the Monetary Authority of Singapore noted that core inflation “eased significantly to below 1% in the first five months of this year, coming in below expectations.”
“For the whole of this year, core inflation is projected to average 0.5%–1.5%, down from 2.8% in 2024,” the MAS said.
The MAS also maintained its forecast of 0%-2% full-year GDP growth, despite Singapore posting GDP growth of 4.1% and 4.3% year over year in the first and second quarters of this year, respectively.
Analysts from Bank of America said in a 16 July note that the MAS seems more concerned about the impact on the domestic outlook from the highly uncertain global growth backdrop.
“For 2H25, MAS expects domestic growth to be ‘subdued’, with global consumption and investment seen softening in the months ahead, and tariffs to hit domestic production and exports with a lag,” the analysts add.
Other experts also told CNBC earlier in July that Singapore’s economy might slow as the boost from front-loading exports fades off into the second half of the year.
“Singapore’s export-oriented services sector will drop back and manufacturing activity will continue to struggle,” Shivaan Tandon, markets economist at Capital Economics, said.
Singapore’s economy is heavily dependent on exports. Figures from the World Bank show that exports made up 178.8% of the city-state’s GDP in 2024.
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