Singapore’s Inflation before Elections: Hits Four-Year Low in March

Singapore’s core inflation, excluding accommodation and private transport, fell to 0.5% year-on-year in March, down from 0.6% in February, hitting a four-year low not seen since March 2021. This marks the sixth consecutive month of decline, with a 0.1% month-on-month drop driven by lower inflation in most Consumer Price Index (CPI) categories, except food. The CPI, which measures consumer price changes for a fixed basket of goods and services, reflects easing price pressures across the economy.

The CPI-All Items inflation held steady at 0.9% year-on-year in March, matching February’s rate. Rising food inflation (from 1.0% to 1.3%) and private transport costs (from 1.6% to 2.1%), driven by higher car prices, were offset by declines in accommodation (1.4% from 1.6%), electricity and gas (-3.5% from -3.1%), and retail goods (-0.5% from -0.4%). Month-on-month, CPI-All Items also dipped by 0.1%. Services inflation eased to 0.6% from 0.8%, reflecting lower costs for communication services and modest transport fare increases.

Ahead of the 2025 General Election, the Elections Department (ELD) increased the campaign spending limit to $5 per voter, up from $4, to account for inflation, marking the first adjustment since 2015 when it rose from $3.50 to $4. For Group Representation Constituencies (GRCs), the limit is $5 per elector divided by the number of candidates in the group. This cap ensures a level playing field and prevents “money politics,” with violations considered illegal. In GE2020, candidates spent over $9 million, primarily on posters, banners, fliers, and online ads, with the People’s Action Party (PAP) spending $2.63 per voter, followed by the Workers’ Party (WP) at $1.21 and Progress Singapore Party (PSP) at $1.19.

The ELD also confirmed minority candidate requirements for the 18 GRCs in GE2025, up from 17, with President Tharman Shanmugaratnam designating specific GRCs for Malay or Indian/other minority candidates. GRCs requiring a Malay candidate include Aljunied, Bishan-Toa Payoh, and the renamed Marine Parade-Braddell Heights, while those needing an Indian or other minority candidate include Ang Mo Kio, Punggol, and the new Jurong East-Bukit Batok. The GRC system, introduced in 1988, ensures multiracial representation. With 2,758,095 eligible voters, boundary changes reflect population growth, particularly in areas like Pasir Ris-Punggol, now split into Pasir Ris-Changi and Punggol GRCs.

Both core and CPI-All Items inflation are projected to remain between 0.5% and 1.5% in 2025, supported by moderate global demand and ample supply, keeping imported inflation low. Domestic factors, such as rising unit labor costs and government subsidies for healthcare, education, and transport, will further moderate services inflation. Analysts note a dovish stance from the Monetary Authority of Singapore (MAS), with potential for policy easing if downside inflation risks persist, especially ahead of MAS meetings in July and October. The GE2025, expected by mid-year, will see heightened competition, with electoral changes potentially influencing campaign strategies.