By Amanda Lee

SINGAPORE--Singapore's consumer inflation eased sharply last year, but with 2026 likely to bring an uptick price growth, monetary policy moves will proceed with caution.

Consumer-price growth remained steady in the final month of 2025, bringing the full-year figure to an average of 0.9% versus 2.4% in 2024.

Core inflation, a gauge the central bank monitors closely that excludes private road transport and accommodation costs, cooled to an average of 0.7% last year from 2.8% in 2024.

Excluding the pandemic, that was the lowest rate of core inflation since 2015, and compared with the central bank's expectations for a print of around 0.5%.

The data come ahead of the Monetary Authority of Singapore's first meeting of 2026 next week, where it is widely expected to hold policy settings steady.

Though inflation has been benign for some time, officials have warned that domestic cost pressures and external risks could rekindle price pressures, signaling continued caution.

The latest data was firm, but that alone would not prompt MAS to tighten its policy settings at the January meeting, Goldman Sachs analysts said in a note.

The top end of the MAS's inflation forecasts for 2026 tips both core and headline reading at 1.5%.

Still, Barclays economist Brian Tan expects the central bank's tone to tilt more hawkish to lay the groundwork for potential tightening later this year,

Singapore's central bank doesn't operate with a formal inflation target, but officials view core inflation averaging under 2% as consistent with overall price stability.

Friday's data from the Department of Statistics showed that the core consumer price index rose 1.2% in December from a year earlier, unchanged from November.

Headline inflation rose 1.2% in the final month of 2025. That compared with a 1.2% increase in November and was higher than the median estimate of a 1.15% rise in a Wall Street Journal poll of 10 economists.

Looking ahead, Singapore's imported costs should continue declining, but at a slower pace, over this year, said the MAS and Ministry of Trade and Industry in a statement Friday.

"The inflation outlook remains subject to uncertainties," the statement read.

Official inflation forecast ranges for 2026 will be updated at the MAS's upcoming meeting, the MAS and MTI said Friday.

 
 
Sector                         Index Weighing          % Change YoY 
Housing & Utilities                    29.38%                  +0.2 
Food                                   20.42%                  +1.2 
Transport                              13.07%                  +3.6 
Recreation, Sport & Culture             5.95%                  +0.3 
Education                               5.79%                  +1.2 
Misc Goods & Services                   4.38%                  +0.1 
Information & Communication             3.81%                  -2.0 
 
 

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

January 23, 2026 04:51 ET (09:51 GMT)

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