Singapore: The pickup in June likely marks the start of a sustained rise in core inflation

Research evidence excerpt

Singapore: The pickup in June likely marks the start of a sustained rise in core inflation

Nomura | Asia Insights 23 July 2026

Overall, we maintain our 2026 core inflation forecast to average 2.1% (Consensus:

2.0%), penciling in an acceleration in coming months after averaging 1.4% in H1

2026 (Figure 4). Note the pickup in June core inflation is before the large adjustments in

electricity tariffs in July, when we expect core inflation to jump to well above 2% as a

result, before rising further to nearly 3% by August/September. Importantly, the output gap

is becoming more positive, so second-round effects from these adjustments could build-

up, as we have been arguing (see FirstInsights-Singapore:Stronggrowthmomentum

sustainedinQ2, 14 July 2026). The outturns in H1 are arguably posing some downside

risk to our full-year forecast but these are easily offset by energy prices rising again. In

addition, an intensifying El Niño will generate significant upside risks.

Fig. 3: Singapore: Food and airfares inflation Fig. 4: Singapore: Core inflation and its sources

Source: CEIC, Nomura Global Economics. Note: Core-core inflation excludes raw food and energy components from the core

inflation basket.

Source: CEIC, Nomura Global Economics.

The CPI data release is the last print before the MAS’ monetary policy statement on

27 July and is therefore a key input into its decision (see FX strategy section below).

Today’s MAS statement reiterated that the balance of risks remain tilted to the upside,

despite highlighting that tightening financial conditions are the main source of downside

risk. In addition, the MAS retained the line that “As higher energy costs pass through

global supply chains with a lag, they are expected to raise production and transport costs