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Official data released on Monday showed that services inflation rose to 1.8 per cent in October from 0.3 per cent the month before.

This was due to a faster pace of increase in health insurance costs, as well as a rise in healthcare services costs and holiday expenses, said the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS).

Electricity and gas inflation fell less steeply because of a smaller decline in electricity prices.

Food inflation increased marginally to 1.2 per cent in October on the back of a faster increase in non-cooked food prices.

Retail and other goods inflation ticked up from 0.3 per cent to 0.4 per cent on account of a rise in the prices of clothing and footwear and personal effects.

Private transport inflation came in at 3.8 per cent, up from from 3.7 per cent in September, due to a steeper increase in car prices, while accommodation inflation fell slightly from 0.4 per cent to 0.3 per cent due to a slower pace of increase in housing rents.

INFLATION “BOTTOMED” IN THIRD QUARTER

The unexpectedly larger jump in October shows that “inflation has likely bottomed”, OCBC head of global markets research and strategy Selina Ling said.

“The recent inflation data underscores why MAS paused its easing monetary policy cycle in July and October 2025 and is likely to continue to be on hold for the upcoming January 2026 monetary policy statement,” Ms Ling told CNA.

“The MAS statement still points to a decline in imported costs, albeit at a slower pace.”

Ms Ling also noted that regional inflation is tipped to pick up modestly and that crude oil prices should see a more modest downside in 2026 as compared to 2025.

DBS senior economist Chua Han Teng noted that with both headline and core inflation below 2 per cent, they remain “contained and consistent with domestic price stability”.

“Singapore’s inflation showed clearer indications that it bottomed in 3Q25, aligning with the MAS’ expectations,” said Mr Chua.

“This trough in core inflation coincided with stronger-than-expected economic growth compared to advance estimates for the same quarter.”

The economic conditions support MAS’ decision to keep its monetary policy unchanged in October, Mr Chua said. 

The central bank’s current policy settings appear consistent with a narrower 0 per cent output gap and higher core inflation of 0.5 to 1.5 per cent in 2026.

“We expect the MAS to keep the powder dry in 2026, maintaining its three policy parameters, safeguarding flexibility in an uncertain global environment,” he added.