Issue #9: What’s Happening This Week?—Inflation Slows, Singapore Dollar to Weaken, and More

How did you feel about prices of your daily essentials in 2024? I know Singaporeans always complain things are expensive, but you might be surprised to know that inflation actually eased last year. And now in 2025, it’s also contributed to MAS easing their monetary policy for the first time in almost 5 years.

That’s not the only thing slowing down. If you’re selling or buying a flat in 2025, take note: we’re expecting HDB resale prices to grow at a gentler pace this year.

Get more details in this edition of What’s Happening This Week?, our weekly series rounding up the latest finance news and updates that matter to you.

TLDR: Singapore’s inflation slowed to 2.4%, but the lowest-income households felt the most impact, with rising costs driven by essentials like food and transport. HDB resale price growth is forecasted grow at a slow pace—around 3.5–8%—in 2025, as shorter BTO waiting times and new flats divert demand from the resale market. Consumers can now file claims for unresolved e-wallet disputes through the Financial Industry Disputes Resolution Centre Ltd (FIDReC), enhancing trust and protection in the digital payments ecosystem. The Singapore dollar may weaken to 1.40 per US dollar as MAS considers easing monetary policy amid lower inflation and slower growth. MAS eased monetary policy slightly—the first time in nearly 5 years—and lowers its 2025 core inflation forecast to 1–2% as inflation slows and growth weakens.

Want more details? Let’s dive in.

 

Psst, missed last week’s issue? View all past editions of What’s Happening This Week? to catch up.

 

Inflation eases in 2024, but one group faces higher costs

Singapore’s inflation slowed to 2.4% in 2024, a significant drop from 4.8% in 2023. However, the lowest-income households felt the pinch the most, with their costs rising by 2.7%, compared to 2.5% for middle-income groups and 2.1% for the highest earners.

The main drivers of inflation were higher prices for food, hospital and outpatient services, and public transport fares. These essentials made up a larger share of the expenditure for lower-income households, causing a bigger impact. Conversely, the highest-income households benefited from lower vehicle prices, which helped offset inflation for them.

Excluding housing-related costs, inflation for the lowest-income group stood at 2.6%, while the middle and highest groups experienced 2.4% and 2.0% inflation, respectively.

 

HDB resale prices to grow at a slower pace in 2025

HDB resale prices are expected to grow more modestly in 2025, with analysts forecasting increases between 3.5% and 8%, compared to 9.7% growth last year. Key factors include the launch of 19,600 Build-to-Order (BTO) flats, including 3,800 units with shorter waiting times, and lower HDB loan interest rates, which may draw buyers toward private properties or new flats.

The reduced waiting times for BTO flats could divert demand from the resale market. The upcoming Sale of Balance Flats (SBF) exercise in Feb 2025, featuring 5,500 units, of which 40% are already completed, is particularly attractive for buyers seeking ready-to-move-in options.

Despite robust demand, resale price growth is expected to temper, driven by policy measures and a limited supply of flats reaching their 5-year minimum occupation period (MOP). Analysts like Christine Sun (OrangeTee) predict a 4–6% increase, while Mohan Sandrasegeran (Singapore Realtors Inc) expects 3.5–5.5% growth, citing a “sustainable and stable market environment.”

The 19th consecutive quarterly rise in resale prices was recorded in 2024, marking the second-longest streak in history. However, lower resale volumes in late 2024 indicate the cooling measures are taking effect, ensuring a balanced market ahead.

 

You can now file claims for e-wallet disputes

Consumers in Singapore now enjoy stronger protection when using e-wallet services, as e-wallet providers are officially included under the Financial Industry Disputes Resolution Centre (FIDReC) framework. Since 16 Dec 2024, these providers have been required to subscribe to FIDReC under a new “Payment Service Providers” category established by the Monetary Authority of Singapore.

This move reflects the rapid growth of the digital payments ecosystem and aims to build trust and accountability between e-wallet providers and their users. Consumers can now file claims with FIDReC if disputes with e-wallet providers are unresolved within 4 weeks. To date, 34 e-wallet providers have joined FIDReC, alongside banks, insurers, and financial advisors.

The inclusion of e-wallet providers also encourages better internal complaint-handling protocols, fostering transparency in the industry. Since implementation, FIDReC has received 16 claims against e-wallet providers. Of these, one was resolved early, 10 are under early resolution, and 5 are undergoing eligibility review for mediation.

 

The Singapore Dollar is likely to weaken (even more)

The Singapore dollar is expected to weaken further, potentially slipping to 1.40 per US dollar over the next year, as market expectations grow that the Monetary Authority of Singapore (MAS) may shift to an easing stance. The currency, currently around 1.37 per US dollar, is already near a 2-year low against the greenback.

A Bloomberg survey of 17 economists suggests that a pivot could come as early as the MAS meeting on 24 Jan 2025, though some anticipate a later move, leaving room to assess global economic developments.

The Singapore dollar’s decline mirrors broader currency trends across Asia, driven by investor concerns over inflationary impacts from US tariffs and scaled-back expectations of Federal Reserve rate cuts. Just four months ago, the Singapore dollar reached its strongest level in a decade at 1.2789 per US dollar but has weakened steadily since.

An easing by MAS would reflect lower inflationary pressures in Singapore. Core inflation, excluding housing and private transport costs, has dipped recently, providing room for a policy shift. With global economic uncertainty and Donald Trump retaking the US presidency, traders are betting on further bearish moves for the Singapore dollar in the months ahead.

 

MAS eases monetary policy—the first time in nearly 5 years

For the first time in nearly 5 years, Singapore’s Monetary Authority of Singapore (MAS) has eased monetary policy amid slowing growth and moderating inflation. The last adjustment occurred in Mar 2020 during the COVID-19 pandemic recession.

In its 24 Jan 2025 statement, MAS announced a slight reduction in the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band. However, the width and central level of the band remain unchanged, ensuring medium-term price stability. The move reflects expectations of weaker growth momentum and lower inflation in 2025.

MAS also revised its 2025 core inflation forecast downward, now estimating it at 1 to 2%, compared to the earlier range of 1.5 to 2.5%. Core inflation, which excludes private transport and housing costs, has been declining faster than expected. In December 2024, it hit a 3-year low of 1.8%, slightly down from 1.9% in November.

This policy adjustment comes as MAS prepares for slower economic growth, with a cautious eye on global and domestic risks. With inflationary pressures easing, this measured policy shift aims to balance economic growth and price stability, setting the stage for a steadier 2025.

 

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