Singapore's inflation rate for May remained unchanged at 1.8%, falling short of market expectations as service costs moderated.

The inflation figure matched the 1.8% level recorded in April and was below the 2% forecast by economists surveyed by Reuters.

Official data indicates that private transport and food prices were the primary drivers of inflation during the period.

In May, the overall consumer price index was stable, as declines in telecommunication service prices offset increases in costs for private transport, accommodation, retail items, and food.

The data confirmed that price rises for cars and motorcycles pushed up private transport inflation, while accommodation, retail, and food prices also contributed to the overall increase.

Core inflation, which excludes accommodation and private transport costs, came in at 1.4%, lower than the market's prediction of 1.6%.

The Monetary Authority of Singapore stated that, despite recent declines, energy prices remain elevated compared to 2025 levels.

The central bank noted that high energy costs have lagged effects and transmit through global supply chains, potentially raising production and transportation costs for a wide range of imported goods and services in Singapore in the coming period.

MAS also indicated that with a slowdown in nominal wage growth, increases in service sector labor costs are likely to narrow this year. Coupled with economic uncertainty, domestic consumer spending may become more cautious.

An analyst commented that elevated fuel prices, influenced by geopolitical tensions involving Iran, along with rising Certificate of Entitlement fees for vehicles in Singapore, contributed to the inflation reading.

The analyst noted that Singapore's management of vehicle population growth continues to push Certificate of Entitlement prices higher.

The release of this inflation data follows MAS's decision to tighten monetary policy in April, marking its first such move since October 2022, a adjustment primarily motivated by inflation risks stemming from Middle East geopolitical conflicts.

Unlike most central banks globally, the Monetary Authority of Singapore implements monetary policy through the exchange rate rather than interest rates, allowing the Singapore dollar to float within an undisclosed policy band against a basket of currencies from major trading partners.

During its April policy review, MAS raised its full-year forecasts for both core and headline inflation, revising the range from 1%–2% to 1.5%–2.5%.

Prior to the inflation data release, Singapore's first-quarter economic growth exceeded expectations, with GDP expanding by 6% year-on-year, surpassing the Reuters poll forecast of 5.1%.

The Ministry of Trade and Industry maintained its 2026 GDP growth forecast in the range of 2%–4%, while cautioning that downside economic risks have increased significantly due to geopolitical conflicts involving the US, Israel, and Iran.