Singapore’s inflation rate YoY rose to 1.20% in November 2025, above the 1.10% consensus and up from 0.70% in October. This marks the highest inflation reading since February 2025, signaling a potential shift in price pressures after a prolonged period of subdued inflation averaging 0.90% over the past six months.

Drivers this month

• Energy prices rebounded modestly, contributing approximately 0.30 percentage points (pp) to inflation.
• Food inflation accelerated, adding 0.25 pp, driven by supply chain disruptions in regional agriculture.
• Core inflation components, excluding volatile items, edged up to 1.00% YoY from 0.70% last month.

Policy pulse

The 1.20% inflation rate remains below the Monetary Authority of Singapore’s (MAS) implicit target range of 2%–3%, but the upward trend may prompt closer monitoring. The MAS has maintained a neutral monetary policy stance, but this print could influence future policy calibration, especially if inflationary pressures persist.

Market lens

Immediate reaction: SGD strengthened by 0.30% against the USD in the first hour post-release, while 2-year government bond yields rose 5 basis points, reflecting heightened expectations of tighter monetary conditions ahead.

Singapore’s inflation trajectory is a critical macroeconomic indicator, closely tied to wage growth, consumer demand, and external price shocks. The 1.20% YoY inflation in November 2025 compares with historical readings of 1.60% in December 2024 and January 2025, showing a recent moderation before the latest uptick.

Monetary Policy & Financial Conditions

The MAS operates a unique exchange rate-centered monetary policy. The recent inflation rise, combined with a strengthening SGD, suggests that financial conditions remain moderately tight. The MAS has kept the SGD nominal effective exchange rate (NEER) policy band unchanged since mid-2025, balancing inflation containment with growth support.

Fiscal Policy & Government Budget

Singapore’s fiscal stance remains prudent, with a budget surplus projected for FY2025. Targeted subsidies and support for vulnerable groups have limited inflation pass-through to household budgets. However, government infrastructure spending continues to support domestic demand, potentially adding upward pressure on prices.

External Shocks & Geopolitical Risks

Global commodity price volatility, especially in energy and food, has influenced Singapore’s inflation. Regional geopolitical tensions in Southeast Asia have disrupted supply chains, contributing to food price inflation. Additionally, global inflationary trends and US Federal Reserve policy tightening indirectly affect Singapore’s import prices and capital flows.

Drivers this month

• Energy inflation rose to 3.50% YoY, up from 1.80% last month, reflecting higher global oil prices.
• Food inflation accelerated to 2.10% YoY, compared to 1.30% in October, due to supply chain disruptions.
• Services inflation remained steady at 1.00%, indicating stable domestic demand.

Policy pulse

The inflation rise remains below MAS’s comfort zone but edges closer to the upper bound. This may prompt MAS to consider modest tightening or recalibration of the SGD policy band in upcoming reviews.

Market lens

Immediate reaction: SGD/USD appreciated 0.30%, 2-year SGS yields rose 5 bps. Markets are pricing in a higher probability of MAS policy adjustment within the next two quarters, reflecting inflation concerns and external rate pressures.

Looking ahead, Singapore’s inflation outlook hinges on several factors, including global commodity prices, domestic wage growth, and external demand conditions. The following scenarios outline potential trajectories:

Bullish scenario (30% probability)

• Global energy prices stabilize or decline, easing cost pressures.
• Supply chain normalizes, reducing food inflation.
• MAS maintains current policy stance, supporting growth.
• Inflation moderates to 1.00%–1.20% YoY by mid-2026.

Base scenario (50% probability)

• Energy and food prices remain elevated but stable.
• Wage growth supports moderate domestic demand.
• MAS signals gradual policy tightening in 2026.
• Inflation hovers around 1.20%–1.50% YoY through 2026.

Bearish scenario (20% probability)

• Geopolitical tensions escalate, disrupting supply chains further.
• Global inflationary pressures intensify, pushing up import costs.
• MAS tightens policy aggressively, risking growth slowdown.
• Inflation spikes above 2.00% YoY, triggering market volatility.

Structural & Long-Run Trends

Singapore’s long-term inflation remains anchored by strong fiscal discipline, a flexible exchange rate regime, and productivity gains. However, demographic shifts and rising housing costs could exert upward pressure over the medium term. The MAS’s ability to adapt policy tools will be critical in balancing inflation control with growth objectives.

The November 2025 inflation print of 1.20% YoY signals a tentative end to the low-inflation phase experienced earlier this year. While still moderate by historical standards, the upward trend reflects renewed cost pressures from energy and food sectors, influenced by global and regional factors. Policymakers face a delicate balancing act: containing inflation without stifling growth amid external uncertainties.

Financial markets have responded swiftly, pricing in a higher likelihood of MAS policy adjustments. Investors and businesses should prepare for a more dynamic inflation environment, with potential volatility in currency and bond markets. Close monitoring of inflation drivers and MAS communications will be essential in the coming months.

Overall, Singapore’s inflation outlook remains cautiously optimistic but fraught with risks. The interplay of external shocks, domestic demand, and policy responses will shape the trajectory through 2026.

Key Markets Likely to React to Inflation Rate YoY

Singapore’s inflation data typically influences currency strength, bond yields, and equity sectors sensitive to interest rates and consumer demand. The following tradable symbols historically track or react to inflation shifts in Singapore:

• SGDUSD: The Singapore dollar’s exchange rate against the US dollar is highly sensitive to inflation and MAS policy expectations.
• STI: Singapore’s benchmark stock index reflects investor sentiment on economic growth and inflation risks.
• DBS: As a major bank, DBS’s stock price correlates with interest rate changes driven by inflation.
• BTCUSD: Bitcoin often reacts to inflation expectations as an alternative store of value.
• USDSGD: The inverse of SGDUSD, this pair also moves sharply on inflation data releases.

Inflation Rate YoY vs. SGDUSD Since 2020

Mini-chart insight: Since 2020, Singapore’s inflation rate and the SGDUSD exchange rate have shown a moderate inverse correlation. Periods of rising inflation often coincide with SGD appreciation, as MAS tightens policy to contain price pressures. For example, the inflation peak in early 2025 aligned with a 4% strengthening of SGDUSD over six months. This relationship underscores the importance of inflation data in shaping currency market dynamics.

FAQ

What does the latest Singapore Inflation Rate YoY indicate?

The 1.20% YoY inflation in November 2025 indicates a moderate rise in price levels, signaling renewed inflationary pressures after a period of subdued growth.

How does Singapore’s inflation affect monetary policy?

Inflation trends influence the MAS’s exchange rate policy stance, potentially prompting adjustments to maintain price stability and support economic growth.

Why is the Inflation Rate YoY important for investors?

Inflation impacts interest rates, currency strength, and corporate earnings, making it a key factor for investment decisions in Singapore’s financial markets.

Key takeaway: Singapore’s inflation rate rising to 1.20% YoY marks a pivotal moment, suggesting the end of a low-inflation phase and increasing the likelihood of policy tightening amid external uncertainties.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.