Singapore reports lower-than-expected inflation for April at 1.8%, revises economic growth higher

• Q1 GDP growth revised significantly upward to 6%, beating both the advanced estimate of 4.6% and Reuters consensus of 5.1%
• Lower-than-expected inflation attributed to timing, as higher energy costs from Iran war expected to materially impact only from Q3 onward
• MAS tightened monetary policy in April for the first time in over three years by adjusting the Singapore dollar policy band, rather than using interest rates like most nations

Summary

Key Economic Data:

Singapore reported April inflation at 1.8%, below the Reuters consensus estimate of 2%. Core inflation, excluding private transport and accommodation costs, came in at 1.4%. The lower-than-expected figures reflect the delayed impact of energy price increases related to the Iran conflict, which authorities expect to materialize in the third quarter.

GDP Revision:

Singapore's Ministry of Trade and Industry significantly revised first-quarter GDP growth upward to 6%, sharply higher than the advanced estimate of 4.6% and exceeding Reuters forecasts of 5.1%. Despite this strong performance, full-year 2026 growth is projected at 2%-4%, reflecting concerns about energy-related disruptions in the Strait of Hormuz.

Monetary Policy:

The Monetary Authority of Singapore (MAS) tightened monetary policy in April for the first time in over three years due to inflation concerns. Unlike most central banks, Singapore manages monetary policy through its currency rather than interest rates, guiding the Singapore dollar within an undisclosed policy band against a trade-weighted basket of currencies.

Market Implications:

Higher energy input costs and potential supply disruptions from ongoing tensions in the Strait of Hormuz are expected to weigh on Singapore's economic outlook. The MAS anticipates continued pressure from energy supply shortfalls, suggesting inflation could rise later in the year. The upward GDP revision provides some cushion, but the cautious full-year forecast indicates authorities remain vigilant about external risks, particularly energy market volatility stemming from the Iran conflict.