S'pore core inflation falls sharply in Jan as price rises ease

Economists expect prices to stay contained, though they warn about effects of US tariffs

- Claire Huang

Singapore's core inflation extended its decline in January to a more than three-year low, on the back of a smaller increase in prices across broad categories, and after a rebasing of the consumer price index (CPI).

The sharp drop in core inflation beat economists' expectations, with some saying prices will continue to be contained in the months ahead, although they warn about the effects of US tariffs.

Core inflation, which excludes private transport and accommodation costs to better reflect the expenses of households here, slid to 0.8 per cent year on year, from a revised 1.7 per cent in December.

This is the lowest since June 2021, when core inflation was 0.6 per cent, and also beat a Bloomberg analysts' forecast of 1.5 per cent. It is also much lower than the 3.1 per cent recorded in January 2024.

DBS Bank economist Chua Han Teng said the big 0.9 percentage point drop in core inflation - from December's 1.7 per cent to January's 0.8 per cent - is a magnitude not seen in years.

He attributed the sharp cooling to a broad-based moderation across major goods and services categories, as well as the fading effects of past goods and services tax (GST) hikes.