UOB’s Jester Koh highlights that MAS raised its 2026 core and headline inflation forecast ranges to 1.5–2.5% as imported power prices surge. He stresses that greater Oil and gasoline costs will go via to Singapore’s CPI through electrical energy, transport and items. UOB has lifted its personal 2026 inflation forecasts and sees dangers tilted to the upside.
Increased power prices raise inflation outlook
“On inflation, MAS raised each its 2026 core and headline inflation forecast ranges to 1.5–2.5%, from 1.0–2.0% within the Jan 2026 MPS. The coverage assertion additionally conveyed a higher diploma of confidence within the inflation outlook than in progress.”
“MAS famous that “even when provides from the Center East are restored, world power costs are prone to stay elevated for a while,” as deliveries will likely be lagged, provide will take time to get well totally, and authorities efforts to rebuild power reserves will add to pent-up demand. Because of this, “costs for Singapore’s imported intermediate and closing shopper items” are forecast to rise.”
“We now have beforehand raised our 2026 headline inflation forecast to 2.0% (from 1.5%; 2027F: 2.2%) and core inflation to 1.9% (from 1.5%; 2027F: 1.9%), and famous that dangers stay tilted to the upside. Spillover results from greater utility, transport, and enter prices on each items and providers inflation are prone to be significant.”
“Below our baseline assumptions, we anticipate MAS to tighten financial coverage additional on the Oct 2026 MPS through a 50 bps S$NEER band slope steepening to 1.5% p.a., with dangers that the transfer could possibly be introduced ahead to the Jul 2026 MPS.”
(This text was created with the assistance of an Synthetic Intelligence software and reviewed by an editor.)
