Singapore Economics: Reiterating Our Non-Consensus Jul Steepening Call Despite Gentler Rise in Jun Core

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Singapore Economics: Reiterating Our Non-Consensus Jul Steepening Call Despite Gentler Rise in Jun Core

Singapore Economics

24 July 2026 Citi Research

Importantly, MAS/MTI outlook still sees risks tilted to the upside “at this

juncture,” implicitly acknowledging recent resurgence in oil prices, with still

“elevated” energy costs to pass through “with a lag” to a “wider” range of items.

– Despite another lower-than-expected core CPI print, the overall tone of the

MAS/MTI outlook remained unambiguously hawkish, and indeed slightly more

hawkish than last month, as last month’s reference to easing energy prices

“recently” was removed in an acknowledgement of the recent resurgence. The rest

of the outlook was otherwise identical to last month, with global energy prices still

seen “elevated” vs levels in 2025 and should pass through to global supply chains

with a lag and raise costs for a “wider” range of items. Meanwhile, the outlook for

domestic costs was similarly subdued, with services unit labour costs seen growing

at a slower pace this year on easing nominal wage growth, similar to the

assessment in the Apr Macroeconomic Review, and consistent with our estimated

sharp slowdown in non-tradables ULC, and for consumer spending to turn more

cautious amid uncertainty.

Importantly, while 2Q26 core was likely lower than MAS’s Apr-26 MPS forecasts,

MAS/MTI continued to see risks to inflation as explicitly tilted to the upside “at this

juncture,” even as downside risks are also present—more hawkish vs the Apr MPS,

which gave no clear indication of the tilt in the balance of risks. Indeed, with the

recent re-escalation, “slower-than-expected resumption in global energy

supplies” remained the key upside risk. Similar to last month, the earlier downside