Inflation Cools in Singapore: Time to Dive into These Plays?

The brakes are finally on inflation in Singapore. Core inflation slowed to 0.5% year-on-year in March, marking its lowest level since June 2021. This slowdown isn’t just a blip—it’s the result of deliberate policy shifts, softer consumer demand, and global headwinds that could reshape investment opportunities in Southeast Asia’s financial hub.

Why the Drop?

The Monetary Authority of Singapore (MAS) has been aggressive in cooling inflationary pressures. After five consecutive tightening cycles between 2021 and 2022, MAS flipped the script in early 2025, easing monetary policy twice to flatten the slope of the Singapore Dollar’s exchange rate band. This move, aimed at supporting growth, has already started to bite.

• Government subsidies: Enhanced aid for essentials like healthcare and public transport has capped price hikes in these sectors.
• Consumer spending pullback: Spending on food, retail goods, and services has softened, reducing upward price pressure.
• Global disinflation: Weaker global demand and lower energy prices have eased imported inflation, even as trade tensions loom.

The MAS now forecasts core inflation to stay within 0.5%–1.5% in 2025, a stark contrast to the 1.5%–2.5% range predicted just a year ago.

Sector Spotlight: Where to Play?

1. Real Estate & REITs

With MAS easing monetary policy, borrowing costs for developers and investors could drop further. While residential prices remain elevated, the cooling inflation environment might stabilize demand.

Key Play:
- CapitaLand Commercial Trust (CWT.SI): A top-tier REIT with exposure to office and retail assets. Its dividend yield of ~4.5% offers stability, and its portfolio includes prime locations like the Singapore Integrated Resorts.

2. Consumer Staples & Healthcare

Lower inflation doesn’t mean deflation—it means companies with pricing power in essentials could thrive.

• Wilmar International (W17.SI): The agribusiness giant dominates palm oil and sugar production. Its dominance in commodity supply chains allows it to weather inflationary or deflationary cycles.
• Raffles Medical Group (RME.SI): Healthcare is a “must-have” sector. With government subsidies keeping costs in check, this primary care provider could see steady demand.

3. Utilities & Infrastructure

MAS’s focus on economic stability may prioritize infrastructure spending.

• Sembcorp Industries (U96.SI): A leader in power generation and water treatment, this stock benefits from Singapore’s push to upgrade utilities.

4. Tech & Semiconductors

Trade tensions, particularly between the U.S. and China, could boost demand for Singapore’s tech sector, which thrives on global supply chains.

• ASM Pacific Technology (0522.HK): A semiconductor equipment maker with exposure to the AI chip boom.

The Risks to Watch

Don’t mistake this slowdown for a free pass. Key risks loom:
- Trade wars: Geopolitical tensions could disrupt supply chains, reigniting inflation.
- Consumer sentiment: If households cut spending further, it could deepen the slowdown.

Bottom Line: Dive In—But Stay Selective

Singapore’s inflation cooldown opens doors for investors, but pick your spots. Focus on defensive sectors (healthcare, utilities) and real estate plays with dividend resilience. Avoid overpaying for cyclicals unless you’re ready to ride volatility.

The MAS’s 0.5%–1.5% inflation forecast and its policy shift to a “modest and gradual appreciation” path signal a prolonged period of low rates. That’s music to the ears of dividend hunters and long-term growth investors.

Final Call:
- Buy: CWT.SI, W17.SI, RME.SI.
- Watch: U96.SI, 0522.HK.
- Avoid: Cyclical stocks without pricing power.

This isn’t just about Singapore—it’s about positioning for a world where central banks are finally hitting the brakes on rate hikes.

Data Sources: MAS April 2025 Monetary Policy Statement, DBS-SKBI SInDEx Survey, Singapore Department of Statistics.
Disclaimer: Always do your own research before investing.