The Merlion statue in the central business district of Singapore, on Tuesday, July 8, 2025.
Bloomberg | Bloomberg | Getty Images
Singapore’s inflation cooled to a lower-than-expected 0.6% in July, as the city-state braced for slower growth later this year.
This was lower than the 0.7% expected by economists polled by Reuters, and was also below the 0.8% seen in June.
Core inflation — which strips out prices of private transport and accommodation — dipped to 0.5%, lower than the 0.6% forecast by the Reuters poll.
The Monetary Authority of Singapore said a fall in retail and other goods prices led to cooler inflation, as well as lower electricity and gas inflation.
Prices of electricity and gas fell 5.6% year over year, the largest decline in the CPI basket, while prices of private transport rose 2.1% from the same period a year ago due to higher car prices.
The central bank said that inflation should remain “moderate” in the near term, citing an easing in global crude oil prices, while food commodity price hikes should also stay contained.
Domestically, slower nominal wage growth and productivity increases “should contribute to a moderation in unit labour costs,” the MAS said.
The MAS, in its annual report last month, projected that core inflation would average between 0.5% and 1.5% for 2025, down from 2.8% in 2024.
“In the near term, imported goods inflation facing Singapore should be modest against the backdrop of slowing global demand.”
The central bank has already eased Singapore’s monetary policy twice this year, in January and April, to cope with weaker growth. It warned that the “downshift” in the global trade environment and rising trade tensions have put the Singapore economy on a path of weaker growth and slower inflation.
On July 30, the MAS forecasted that Singapore’s economic growth would moderate in the second half of the year, despite strong GDP in the first six months.
Trade-dependent Singapore has also faced a baseline 10% “reciprocal” tariff on its exports to the U.S. from the Trump administration, despite running a trade deficit with the U.S. and having a free trade agreement since 2004.
Singapore did not receive a “tariff letter” and has yet to come to a deal with the Trump administration.