CGS International
August 25, 2025
Singapore’s Inflation Slips: What Softer Cost Pressures Mean for Investors in H2 2025
Singapore Inflation: Key Trends and Outlook for 2025
Singapore’s inflation rate continued its downward trajectory in July 2025, with both core and headline consumer price indices (CPI) coming in below market expectations. Core inflation eased to 0.5% year-on-year (YoY), while headline inflation dropped to 0.6% YoY, slightly undercutting consensus forecasts. This moderation was primarily driven by softer retail and other goods prices, combined with a substantial decline in electricity and gas costs. Accommodation costs also softened, decelerating from 1.0% YoY in June to just 0.5% in July.
CGS International maintains its full-year 2025 forecast for Singapore’s headline inflation at 1.0% YoY, consistent with the Monetary Authority of Singapore’s (MAS) projected range of 0.5–1.5%. The subdued inflationary environment is expected to persist, supported by government rebates, lower global energy prices, and contained food commodity costs 1.
Energy and Utilities: Easing Tariffs Drive Down Inflation
The most pronounced drop was in electricity and gas inflation, which plunged to -5.6% YoY in July, compared to -3.9% in June. This steep decline was attributed to:
A 2.3% reduction in electricity tariffs for the July–September quarter, driven by cheaper fuel prices.
A 1.9% decrease in City Gas tariff, further reflecting lower global fuel costs.
Substantial government U-Save rebates of S$110–190 for over 950,000 HDB households, alongside partial or full S&CC rebates, helping to cushion lower and middle-income families against elevated living costs.
Electricity and gas account for 2.0% of Singapore’s CPI basket, and further moderation is anticipated throughout Q3 2025 1.
Inflation Risks: Geopolitics vs. Global Demand
While MAS notes that global crude oil prices have eased and food commodity prices remain stable, persistent trade tensions and potential geopolitical shocks could still pose upside risks to inflation. However, these are likely to be offset by weaker global demand, exerting a disinflationary drag on Singapore’s import prices. Ongoing government subsidies for essential services are expected to continue dampening services inflation.
Investors should note the two-sided nature of inflation risks:
Upside: Renewed geopolitical tension could elevate imported energy and shipping costs.
Downside: Softer global and domestic growth may keep core inflation subdued for longer.
The overall balance is expected to keep Singapore’s inflation path steady, with headline inflation for 2025 forecast at 1.0% YoY 1.
Singapore CPI Breakdown: July 2025 Data
Below is a detailed table capturing key CPI components, their weights, and recent changes:
| Category |
Weight (%) |
May 2025 (% YoY) |
Jun 2025 (% YoY) |
Jul 2025 (% YoY) |
7M25 Avg (% YoY) |
Jul 2025 (% MoM, sa) |
| Consumer Price Index (CPI) |
100.0 |
0.8 |
0.8 |
0.6 |
0.9 |
0.0 |
| MAS Core Inflation |
– |
0.6 |
0.6 |
0.5 |
0.6 |
– |
| Food |
20.4 |
1.1 |
1.0 |
1.1 |
1.2 |
0.3 |
| Clothing & Footwear |
1.7 |
-3.3 |
2.2 |
-2.3 |
-1.4 |
-2.4 |
| Housing & Utilities |
29.4 |
1.0 |
0.9 |
0.3 |
1.0 |
0.0 |
| Household Durables & Services |
5.5 |
-0.2 |
-0.4 |
-0.5 |
-0.4 |
0.0 |
| Health Care |
10.1 |
2.7 |
2.8 |
2.4 |
2.2 |
-0.3 |
| Transport |
13.1 |
1.7 |
2.0 |
2.1 |
2.1 |
0.2 |
| Communication |
3.8 |
-1.9 |
-2.4 |
-2.6 |
-1.6 |
-0.1 |
| Recreation & Culture |
6.0 |
-2.0 |
-2.6 |
-1.2 |
-1.4 |
1.1 |
| Education |
5.8 |
0.5 |
0.5 |
0.7 |
0.4 |
0.3 |
| Miscellaneous Goods & Services |
4.4 |
-0.4 |
0.0 |
-0.4 |
-0.3 |
-0.2 |
Regional Macro Forecasts: Singapore and ASEAN Peers
CGS International provides macro forecasts for Singapore and its regional peers, highlighting GDP growth, inflation, fiscal balance, and reserves outlook.
| Metric |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
2025F |
2026F |
| Singapore Real GDP (% YoY) |
3.5 |
1.3 |
-3.9 |
9.7 |
3.8 |
2.2 |
4.4 |
1.6 |
2.5 |
| Singapore Headline Inflation (Avg, % YoY) |
0.4 |
0.6 |
-0.2 |
2.3 |
6.1 |
4.8 |
2.4 |
1.0 |
1.7 |
| Singapore Headline Inflation (End-Period, % YoY) |
0.5 |
0.8 |
0.0 |
4.0 |
6.5 |
3.7 |
1.8 |
0.9 |
1.9 |
| Fiscal Balance (% of GDP) |
0.7 |
0.2 |
-10.8 |
0.3 |
0.3 |
-0.5 |
0.9 |
0.9 |
0.2 |
| Unemployment Rate (End-Period, %) |
1.9 |
2.0 |
2.8 |
2.1 |
1.8 |
1.8 |
1.7 |
2.0 |
2.1 |
| Current Account Balance (% of GDP) |
15.2 |
14.5 |
16.6 |
19.8 |
18.0 |
17.7 |
17.5 |
16.4 |
14.2 |
| International Reserves (US\$ bn) |
287.7 |
279.5 |
362.3 |
417.9 |
287.5 |
347.6 |
371.4 |
380.0 |
390.0 |
| SGD/USD (End-Period) |
1.36 |
1.35 |
1.32 |
1.35 |
1.34 |
1.32 |
1.36 |
1.30 |
1.31 |
Company Coverage and Analysis
The report does not provide specific coverage or analysis of individual listed companies for Singapore or ASEAN markets. The focus is on macroeconomic indicators, inflation, and policy—rather than equity research or company-level performance. There are no earnings reviews, forecasts, or direct commentary on any listed companies within the scope of this research.
Regulatory Notices and Disclaimers
A comprehensive set of regulatory disclosures is included for global jurisdictions. Investors should be aware of the legal and regulatory environment pertaining to their region, as well as the limitations and the confidential nature of the report. The research is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities.
Key Takeaways for Financial Audiences
Singapore’s inflation is trending lower, with July 2025 figures undershooting expectations.
Electricity and gas prices are seeing significant declines thanks to tariff cuts, falling fuel prices, and government rebates.
Risks to the inflation outlook remain two-sided, with geopolitical tensions and global demand both playing critical roles.
The macroeconomic environment is stable, with Singapore’s GDP growth and fiscal balance expected to remain resilient.
No specific company coverage or stock recommendations are included in this analysis.
Investors, analysts, and market watchers should monitor further CPI releases and government policy moves, as these will inform short- and medium-term trends for Singapore’s economy and financial markets.
