Singapore’s core, headline inflation hold steady at 1.2% in November

[SINGAPORE] Core and headline inflation remained unchanged from October levels in November on a yearly basis, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said on Tuesday (Dec 23), as they maintained their full-year forecasts.

Core inflation, which excludes accommodation and private transport, was 1.2 per cent in November, similar to that in October. This was because higher services inflation was offset by lower retail and other goods inflation, and a steeper decline in the cost of electricity and gas, the authorities said.

Headline inflation also came in at 1.2 per cent last month, the same as October, which MAS and MTI said mainly reflected accommodation and core inflation remaining unchanged.

The month’s readings were marginally lower than the median estimates from Bloomberg’s polls of private-sector economists, which had put both measures at 1.3 per cent.

OCBC chief economist Selena Ling said: “The last time we had core inflation registering a consecutive increase of more than 1 per cent year on year (yoy) was back in November and December 2024, at 1.9 per cent and 1.7 per cent yoy, respectively.”

On a month-on-month basis, the core prices edged down by 0.1 per cent in November, while the all-items consumer price index (CPI) prices rose by 0.2 per cent.

The stable yoy inflation does not detract from UOB’s previous assessment that highlighted further signs of reflation, said Alvin Liew, senior economist at the bank.

While core inflation could normalise in the coming months, aided by low base effects, the risks of “an undue acceleration in prices” currently remain contained, he said.

He expects unit labour costs to stay moderate, noting that a falling proportion of companies in the Ministry of Manpower’s recent labour market survey said they intended to raise wages, though this may be partly offset by moderating labour productivity.

UOB and OCBC both pencilled in core inflation of 0.7 per cent and headline inflation of 0.9 per cent for 2025.

For 2026, OCBC forecast that both core and headline inflation will be around 1.3 per cent, yoy; UOB expects both to be 1.5 per cent.

Liew said his predictions incorporate the impact of rising costs associated with the green transition and administered measures.

These include airfare hikes due to sustainable aviation fuel levies; a potential increase in electricity tariffs driven by the carbon tax hike; and the increase in bus and train fares. But these could be partially offset by the lowering of full-day childcare fee caps for anchor and partner operators.

While RHB also anticipates core inflation of 0.7 per cent for 2025, its full-year forecast for headline inflation is slightly higher than the other two banks’, at 1 per cent.

For 2026, RHB’s associate research analyst Laalitha Raveenthar believes that it will “edge higher towards 1.5 per cent”.

For 2025, MTI and MAS kept their forecasts at 0.5 per cent for core inflation, and 0.5 to 1 per cent for headline inflation. They also maintained their 2026 full-year forecasts at 0.5 to 1.5 per cent for both core and headline inflation.

Their outlook statement was also identical to the preceding month’s, flagging uncertainties.

They continue to expect imported costs to decline, albeit at a slower pace.

Noting that the authorities expect global crude oil prices to retreat more gradually in 2026 than in 2025, Ling said OCBC’s average forecast for Brent is US$62 per barrel, against the US$68.30 average for 2025 in the year to date, due to ample supply conditions.

Domestically, “administrative factors temporarily dampening inflation are expected to continue tapering over the coming quarters”, MAS and MTI said.

But they added that supply shocks could lift imported costs abruptly, while “a sharper-than-expected weakening in global demand could keep core inflation lower for longer”.

Raveenthar believes that MAS will leave its monetary policy settings unchanged at least until the end of the first half of the year, “with no clear impetus for accommodation at this stage”.

UOB’s Liew expects no change going into 2026, but added: “The risk factor is that if core inflation momentum continues to normalise in the coming months, alongside resilient growth prospects anchored by persistent (artificial intelligence-related) demand, then monetary policy tightening (via a steepening of the Singapore dollar nominal effective exchange rate slope) could come into view as early as the April 2026 Monetary Policy Statement.”

While OCBC’s Ling anticipates that inflation will rise in 2026, she said this alone does not warrant a policy shift in January, “as long as core inflation stays within the comfort range of 0.5 to 1.5 per cent yoy”, barring further tariff shocks.

Key CPI categories

Price movements were mixed across CPI categories in November. Most categories saw inflation moderate or hold steady.

Private transport inflation eased to 3.5 per cent, from 3.8 per cent in October, on the back of a smaller increase in car prices.

Retail and other goods inflation dipped to 0.3 per cent in November, from 0.4 per cent previously, as the prices of clothing and footwear and other appliances for personal care declined.

Meanwhile, electricity and gas prices fell more sharply at 4.1 per cent, compared with 4 per cent in the preceding month, because of a larger decline in electricity costs.

Accommodation costs rose at a steady pace – 0.3 per cent – as housing rents increased at a similar rate in October and November.

Food inflation was unchanged, at 1.2 per cent, as the prices of food services and non-cooked food rose at the same pace as in October.

Only services inflation edged up. It was 1.9 per cent in November, against October’s 1.8 per cent. This was due to larger increases in the costs of point-to-point transport services and health insurance.