Singapore’s core inflation falls to 0.8% in January, lowest since June 2021

Singapore’s core inflation fell to 0.8% year-on-year in January 2025, marking a significant drop from the revised 1.7% recorded in December 2024.

This decline was attributed to lower inflation across all broad consumer price index (CPI) categories, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) announced on 24 February.

This is the lowest core inflation rate since June 2021, when it stood at 0.6%. On a month-on-month basis, core inflation—excluding accommodation and private transport—fell by 0.2%.

Meanwhile, overall inflation also eased, dropping to 1.2% in January from 1.5% in December.

The moderation in overall inflation was primarily due to a slowdown in accommodation inflation, in addition to the decline in core inflation, according to MAS and MTI.

Month-on-month, overall inflation decreased by 0.7%.

Inflation trends across key sectors

The decline in core inflation was broad-based, affecting several key sectors.

Services inflation fell from 1.6% in December to 1.0% in January, largely due to lower costs in general, vocational, and higher education, as well as outpatient and inpatient healthcare services.

Food inflation slowed to 1.5%, down from 2.3%, as price increases for prepared meals moderated.

Accommodation inflation dropped from 2.1% to 1.6% due to smaller increases in housing rents, maintenance, and repair costs.

Retail and other goods inflation declined from 0.5% to -0.6%, driven by a sharper drop in footwear prices, as well as falling costs of medical goods and other personal effects.

Electricity and gas inflation recorded a significant drop, from 2.4% in December to -2.9% in January, mainly due to lower electricity prices, though gas prices rose at a slower pace.

Private transport inflation, however, moved in the opposite direction, rising to 2.8% in January from -0.9% in December, as car prices increased.

Inflation outlook for 2025

MAS and MTI expect Singapore’s imported inflation to remain moderate, supported by favourable supply projections in key food commodity markets and forecasts of declines in global oil prices.

While potential trade frictions could raise inflation in some economies, their impact on Singapore’s import prices is expected to be offset by weaker global demand, according to the authorities.

Domestically, unit labour costs are projected to rise gradually as nominal wage growth eases while productivity increases.

Meanwhile, enhanced government subsidies for essential services—such as public healthcare, preschool education, and public transport—are expected to help contain services inflation.

Given these factors, MAS and MTI maintained their forecast for core inflation, projecting it to average between 1.0% and 2.0% in 2025.

Overall inflation is expected to range from 1.5% to 2.5% in 2025, with an anticipated rise in private transport inflation playing a key role in the outlook.