Core inflation in Singapore rises to 0.7% amid economic uncertainty

In April 2025, Singapore's annual core inflation rate rose to 0.7%, surpassing economists' predictions and marking an increase from March's rate of 0.5%. This rise is noted as the first increase since September 2024, when core inflation peaked at 2.8%. Officials attribute the current low inflation rates to ongoing uncertainties in the global economy, particularly concerns surrounding U.S. tariffs and the extended trade negotiations with China. Despite the slight increase in core inflation, it remains below 1% for the fourth consecutive month. The Monetary Authority of Singapore (MAS) has expressed its concerns regarding the country's economic outlook, prompting a second monetary policy easing in April. Alongside this, the MAS has revised its inflation forecast downward, supporting an anticipated core and headline inflation range between 0.5% and 1.5%. Officials have also adjusted the GDP forecast for 2025, reducing it to a range of 0% to 2%, down from a previous projection of 1% to 3%. The rationale for this adjustment reflects the broader implications of persistent trade uncertainties and potential risks of recession in Singapore. The disinflationary trends are expected to continue, according to economists, while the uncertainty over the outcome of U.S.-China trade talks has further complicated Singapore’s economic landscape. The rise in core inflation may seem positive on the surface, but it is overshadowed by the looming external risks and domestic concerns regarding economic growth. The current geopolitical climate coupled with trade tensions places significant strain on the local economy, leading to cautious consumer spending and investment. Moving forward, the economic landscape in Singapore will heavily hinge on the resolutions from ongoing international trade negotiations, particularly those concerning tariffs imposed by the United States. Experts predict that the inflation rates will remain under pressure despite any short-term improvements, and manufacturers and consumers alike will continue to experience the ripple effects of decisions made in global trade discussions. Maintaining sustainable growth amidst these challenges remains a priority for Singapore’s authorities and economic planners.