MAS raises core inflation forecast for 2026 to 1.5-2.5%, monetary policy tightened amid global tensions
The Monetary Authority of Singapore (MAS) has raised its core inflation forecast for 2026, signalling that price pressures may stay higher for longer.
In its policy statement on 14 April, MAS revised its core inflation range from 1.0–2.0% to 1.5–2.5%.
Source: MAS
Core inflation does not include accommodation and private transport, and is seen as a better gauge of everyday cost pressures.
“For the non-core items, private transport inflation will come in higher due to the hike in fuel prices,” MAS said.
“However, this will be offset to some extent by subdued accommodation inflation amid weaker housing rental growth over the past year.”
MAS added that global uncertainties — including rising energy prices — are expected to keep costs elevated, which could translate to higher prices for essentials such as food and retail items.
Policy tightened to manage rising costs
To manage inflation, MAS will slightly strengthen the Singapore dollar.
Source: MAS
A stronger currency helps reduce the cost of imports, which can, in turn, ease price increases locally.
The central bank said this move is meant to keep inflation under control over the medium term.
Economic growth shows signs of slowing
Separately, MAS flagged that Singapore’s economic growth has begun to moderate.
The economy shrank by 0.3% in the first quarter of 2026, a reversal from the 1.3% growth in the previous quarter.
Source: AmerTrans Logistics
While the slowdown was expected after stronger performance last year, it reflects softer global demand and ongoing uncertainties.
MAS added that full-year growth is likely to come in weaker than 2025, with an updated forecast to be released in May.
“MAS is in an appropriate position to respond effectively to any risk to medium-term price stability and will continue to closely monitor economic developments amid uncertainties in the external environment.”
Source: Investopedia
Some support from domestic sectors
Despite the softer outlook, MAS noted that certain areas — such as technology and public infrastructure projects — could help support the economy.
MAS said that economic activities in markets such as Artificial Intelligence (AI) are likely to be unaffected for the time being.
Source: MS News
Ongoing investments in housing and infrastructure are also expected to provide some buffer against external pressures.
Also read: S’pore core inflation jumps to 1.4% in Feb, highest since Dec 2024
S’pore core inflation jumps to 1.4% in Feb, highest since Dec 2024
Have news you must share? Get in touch with us via email at news@mustsharenews.com.
Featured image adapted from MAS
