Singapore’s consumer price index (CPI) grew by 0.9% year-on-year in February, marking the slowest inflation growth in four years, according to a report from the Department of Statistics released on Monday. This figure aligns with economists’ expectations, as it was lower than the 1.2% rise recorded in January.
Core Inflation Also Drops
Core inflation, which excludes the cost of accommodation and private transport, registered a 0.6% increase, down from 0.8% in January and lower than the 0.7% expected by economists in a Reuters poll. The decrease in both headline and core inflation reflects a continuing downward trend in consumer prices in the city-state.
Monetary Policy Adjustments in Response to Inflation Trends
The slowdown in inflation has led the Monetary Authority of Singapore (MAS) to adjust its monetary policy for the first time since 2020. In January, MAS noted the faster-than-expected decline in inflation, along with concerns about slower economic growth, prompting a loosening of its policy stance.
Outlook for Inflation and Economic Growth
Looking ahead, MAS has forecast headline inflation to average between 1.5% and 2.5% in 2025, a slight decrease from the 2.4% expected for 2024. In addition, core inflation is now projected to range between 1% and 2% in 2025, a reduction from its previous forecast of 1.5%–2.5%.
As for the country’s economy, Singapore’s GDP growth is expected to slow to between 1% and 3% in 2025, a significant dip from the 4.4% growth seen in 2024. The government’s economic outlook reflects concerns over global growth headwinds and domestic challenges, as inflation continues to ease.
