Factors Towards 2026 Forecast Upward Revision for MAS' Core Inflation and CPI-All Items, and Household Impact Assessment
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the drivers for the revised 2026 inflation forecasts and the impact on households, as raised by Dr Wan Rizal. Deputy Prime Minister and Minister Gan Kim Yong attributed the 1.5% to 2.5% forecast range to higher global energy costs from the Middle East conflict, impacting electricity and food prices. He stated that enhanced healthcare and education subsidies, along with co-funding for essential bus services, will help offset the cost of living for lower- and middle-income households. The Government will also advance the $500 CDC Voucher disbursement to June 2026 and provide an additional $200 for the Cost-of-Living Special Payment. Ongoing monitoring of the Middle East situation continues, with the Government standing ready to provide further assistance if necessary.
Transcript
9 Dr Wan Rizal asked the Deputy Prime Minister and Minister for Trade and Industry (a) which expenditure components contributed to the upward revision in the 2026 forecasts for MAS Core Inflation and CPI-All Items inflation; and (b) what assessment has been made of the impact on lower- and middle-income households, especially households with higher spending on essential services.
Mr Gan Kim Yong: The 2026 forecasts for the Monetary Authority of Singapore (MAS) Core Inflation and CPI-All Items inflation were both revised upwards to 1.5% to 2.5%, from 1.0% to 2.0%, in MAS' Monetary Policy Statement released on 14 April 2026.
The main drivers for the upward revision in inflation forecasts are higher projected electricity and town gas and transport-related services inflation due to the sharp increase in global crude oil and natural gas prices triggered by the Middle East conflict. At the same time, the higher global energy costs are expected to raise the costs of a broader range of Singapore's imported goods and services. Consequently, the projected inflation rates for domestic non-cooked food, food services and retail goods have also been revised upwards.
The impact of higher inflation will be felt by most households in Singapore. In particular, higher electricity and town gas and food inflation will affect lower- and middle-income households more as these items make up a larger share of their total expenditure. Nonetheless, the impact on their cost of living is expected to be partially offset by the reduced costs of healthcare and education services this year, due to enhancements to the public healthcare and education subsidies introduced in 2025 and early 2026.1
The Government has also put in place enhanced measures to help lower- and middle-income households, as well as more vulnerable groups, cope with rising costs during this period. For instance, the Government will temporarily co-fund the cost increases faced by operators of essential bus services, such as those for school students, seniors and persons with disabilities, so that these services can continue to operate without disruption. In addition, the Government will bring forward the disbursement of the $500 CDC Vouchers announced in Budget this year from January 2027 to June 2026 and also increase the Cost-of-Living Special Payment by $200 for all eligible Singaporeans.
The Government is monitoring the Middle East situation closely and stands ready to provide further assistance if necessary.