Singapore's inflation slowed to 1.2%, lower than expected, hitting a four-year low.

Singapore's year-on-year inflation rate in January rose by 1.2%, the lowest level since February 2021, lower than the revised 1.5% in December last year. This is the first major economic data released by Singapore since the announcement of the 2025 budget on February 18, which promised more support for families and businesses to cope with the cost of living pressures. In his budget speech, Singapore Prime Minister Lee Hsien Loong said, "While inflation is expected to further ease this year, prices are still high. Singaporeans are still adjusting to these new price realities." This overall inflation data is much lower than the 2.15% increase expected by surveyed economists. Singapore's core inflation rate (excluding private transport and accommodation prices) rose by 0.8% year-on-year, down from the 1.8% increase in December last year and lower than the expected 1.5% growth. Singapore's Ministry of Trade and Industry said in a statement that the slowdown in inflation was mainly attributed to "a decline in the inflation rates for all major components of the core CPI". The department stated that Singapore's imported inflation is expected to remain moderate and added, "While escalating trade frictions may exert inflationary pressures on some economies, global demand weakness may offset their impact on Singapore's import prices." At the time of this data release, Singapore eased its monetary policy for the first time since 2020 in January, citing a faster-than-expected decrease in inflation and a possible slowdown in economic growth. The Monetary Authority of Singapore said that inflation for this year will stay below 2%, "reflecting the return of potential price pressures in the economy to low and stable levels". The overall inflation rate is expected to average 1.5%-2.5% in 2025, compared to 2.4% in 2024. The MAS also revised down its forecast for core inflation to an average of 1%-2% in 2025. Following the data release, the Singapore dollar rose against the US dollar. Earlier, the Singapore dollar reached its highest level since November last year against the US dollar.