Singapore Core Inflation Holds at 1.4%, Defying Oil Spike

Singapore’s core inflation rate held steady at 1.4% in May, defying expectations that Middle East energy price spikes would push it higher. The all-items print came in at 1.8%, below the 2% median forecast in a Bloomberg survey, the Department of Statistics said Tuesday.

Core inflation, which strips out housing and private transport costs, matched April’s pace and undershot the 1.6% median estimate by 0.2 percentage points. Transport costs accelerated to 7.4% and food inflation edged up to 1.8%. Housing and utilities, by contrast, stayed flat at 0.2%.

The data suggests Singapore has been relatively insulated from the oil crunch so far. A strong currency and diversified energy supply chains likely dampened the pass-through, though the Monetary Authority of Singapore and the trade ministry noted the inflation outlook carries two-sided risks. Slower recovery in global energy supplies or supply-chain disruptions could push imported inflation higher; a sharper tightening in global financial conditions could cool demand and pull prices lower.

The MAS tightened policy in April and raised its core inflation forecast to 1.5%–2.5% for the year. The May print, combined with retreating oil prices, has removed any urgency for further tightening at the July meeting, said Selena Ling, an economist at Oversea-Chinese Banking Corp.

Barclays economist Brian Tan went further. He lowered his 2026 core inflation forecast to 1.6% from 1.7% on softer oil prices. The risk of another MAS tightening has shifted from July to October. “Policymakers have been surprised by how mild inflation has been,” Tan said.

The readthrough for commodities is that the Middle East supply scare has not yet reached consumer prices in import-dependent Asia. That takes some pressure off central banks to hike in response to oil spikes, which in turn removes a headwind for crude oil demand forecasts. The same data shows that when the pass-through does come, if transport costs stay elevated, it shows up in headline inflation first, not in the core measure the MAS targets.

First-quarter GDP came in at 1%, beating the 0.2% consensus forecast, driven by AI-linked electronics exports and digital services. That gives the economy room to absorb external price shocks without forcing the MAS’s hand. The BCS stock page tracks the implications for Barclays’ earnings, given economist Tan’s role in the inflation forecast adjustments.