The Monetary Authority of Singapore (MAS) has raised its 2026 core and headline inflation forecast ranges to 1.5–2.5%, up from the previous 1.0–2.0% projected in the January 2026 Monetary Policy Statement (MPS), according to UOB’s Jester Koh [1]. This adjustment comes as imported energy costs, particularly oil and gas, have surged, with expectations that these higher prices will pass through to Singapore’s Consumer Price Index (CPI) via electricity, transport, and goods [1].
UOB has also revised its own 2026 inflation forecasts, lifting headline inflation to 2.0% (from 1.5%) and core inflation to 1.9% (from 1.5%), with 2027 forecasts at 2.2% for headline and 1.9% for core inflation [1]. The bank notes that risks to these forecasts remain tilted to the upside, citing meaningful spillover effects from higher utility, transport, and input costs on both goods and services inflation [1].
MAS indicated that even if energy supplies from the Middle East are restored, global energy prices are likely to remain elevated for some time due to lagged deliveries, slow supply recovery, and government efforts to rebuild energy reserves, which will add to pent-up demand [1]. Consequently, prices for Singapore’s imported intermediate and final consumer goods are forecast to rise [1].
Looking ahead, UOB expects MAS to tighten monetary policy further at the October 2026 MPS, potentially via a 50 basis point S$NEER band slope steepening to 1.5% per annum. There is also a risk that this move could be brought forward to the July 2026 MPS, depending on inflation developments [1].
CONCLUSION
MAS’s upward revision of its 2026 inflation forecasts reflects persistent imported energy cost pressures, with UOB anticipating further monetary policy tightening. The outlook suggests continued vigilance on inflation risks, with potential policy action as early as July 2026 if price pressures persist.