Singapore's inflationary pressures are expected to intensify in the coming months as higher energy costs linked to the Middle East conflict gradually feed into consumer prices, although economists said the full impact has yet to be reflected in current inflation data.
Maybank Investment Bank on Monday said in a note that firms outside the transport and utilities sectors are likely to begin passing on higher input costs to consumers in the coming months, broadening inflationary pressures across the economy.
"We expect monthly inflation to overshoot 2 percent in the second and third quarters," the research house noted.
Maybank said April's softer inflation reading was likely temporary, noting that administrative factors had partly contributed to lower health insurance and water price inflation.
It added that the pass-through of higher energy prices has so far been largely confined to fuel and transport services, while businesses in other sectors may have delayed price increases due to intense competition, weaker consumer demand or existing inventory buffers.
The research house maintained its 2026 core inflation and headline inflation forecasts at 1.9 percent and 1.8 percent, respectively.
Separately, RHB Investment Bank Research said Singapore could face mounting cost-push inflation as persistent disruptions to Middle East oil supplies continue to ripple through global supply chains.
The research house noted that April headline inflation remained at 1.8 percent year on year, lower than expected, as the impact of elevated energy costs stemming from geopolitical tensions is likely to be felt more significantly from the third quarter onward.
"Singapore may face mounting cost-push pressures as elevated oil prices feed into transportation, utilities and business operating costs, potentially spilling over into broader consumer inflation," it said.
RHB identified volatile global commodity prices, persistent cost-push inflation and rising food costs as key drivers of Singapore's inflation outlook over the near to medium term.
It added that higher fertilizer prices, coupled with El Nino-related weather disruptions, could exert additional upward pressure on food inflation through global supply chain channels.
RHB maintained its 2026 headline inflation forecast at 2.5 percent and core inflation projection at 2 percent, while warning of further upside risks.
UOB Global Economics and Markets Research also kept its 2026 core inflation forecast at 1.9 percent and headline inflation projection at 2.2 percent, saying risks remain tilted to the upside.
"Under our baseline assumption, core inflation could strengthen meaningfully from June 2026 onwards and peak at 2.5 percent in August, before moderating towards the 2 percent level in the fourth quarter," the research house said.
Singapore's headline inflation in April stood unchanged at 1.8 percent year on year, while core inflation eased to 1.4 percent from 1.7 percent in March.
Singapore inflation pressures seen rising as higher energy costs filter through
