Singapore Inflation Drops to 4-Month Low: Here Are 5 Things to Know

Jakarta, Pintu News – Singapore recorded another significant slowdown in inflation in July 2025, sparking concern from global market participants and monetary policy analysts. Despite many sectors showing price declines, the government maintained its annual inflation forecast. What impact will this have on the market and economy? Here are 5 important things to know.

1. Core and Overall Inflation Fall Lower than Expected

According to a report from Cryptopolitan released on August 25, 2025, Singapore’s core inflation fell to 0.5%, while overall inflation fell from 0.8% to 0.6%. This core inflation excludes the components of housing costs and private transportation, making it a more stable indicator.

This decline was lower than analysts’ expectations, who expected inflation to remain as it was in June. The report was based on official data from the Singapore Department of Statistics, which showed price declines in retail goods and energy.

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2. Government maintains inflation projection for 2025

Despite declining inflation, the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) have maintained their inflation projections for 2025. The projections are in the range of 0.5% to 1.5% for both core and overall inflation.

In their statement, MAS and MTI cited both positive and negative risks to the inflation outlook. They highlighted that geopolitical tensions and imported energy costs could boost inflation, but slower global or domestic economic growth could also hold it back.

3. Energy, Housing, and Healthcare Prices Decline Sharply

The decline in inflation was mainly triggered by lower energy prices, including electricity and gas which plummeted by 5.6%, after falling by 3.9% in June. In addition, housing inflation declined from 1% to 0.5%, driven by lower rent and maintenance costs.

The healthcare sector also recorded drastically lower costs, especially for outpatient services. Meanwhile, declining holiday spending slightly offset inflation from social services which stabilized at 0.7%.

4. Some Sectors Still Experiencing Price Increases

Despite the downward trend, some sectors still showed an increase in inflation. An example is the food sector, which saw an increase from 1% to 1.1%, due to rising prices of raw materials and food services.

Public transportation also recorded an increase in inflation from 2% to 2.1%, largely due to higher vehicle prices. This shows that although inflationary pressures eased overall, price increases persisted in certain sectors.

5. Policy Outlook: Stable But Cautious

MAS last made policy adjustments in January and April, and decided not to change policy on July 30, 2025. They expect that imported inflation will remain moderate, supported by the decline in global oil prices and only mild increases in food costs.

In addition, the MAS anticipates a sharp decline in labor costs, as wage growth slows and productivity increases. Government subsidies for essential services are also expected to curb service inflation in the months ahead.

Inflation Drops, but Uncertainty Remains

The decline in Singapore’s inflation to the lowest level in four months gives hope that price pressures are easing. However, the government remains cautious as external risks still lurk, particularly related to geopolitics and global market conditions.

For cryptocurrency market participants, this macro situation is important to keep an eye on, as monetary policy movements in Asia can affect capital flows in the crypto market regionally and globally.

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Reference:

• Nellius Irene / Cryptopolitan. Singapore inflation cools to 4-month low. Accessed August 26, 2025