Indonesian Gas Export Cut May Complicate Singapore's Inflation Outlook

what happened

Indonesia's decision to reduce gas exports to Singapore could complicate the Monetary Authority of Singapore's latest inflation forecast, economists at Standard Chartered say in a note cited by Market Talk. They note the cut is less than 2% of the city-state's daily gas demand, a relatively small share.

The MAS expects core inflation to ease more visibly from mid-2027, partly because supply-driven imported price pressure is forecast to slow. Standard Chartered says that moderation now looks less certain. A protracted conflict in the Middle East would keep global fuel prices elevated, and regional producers are increasingly putting domestic consumers first.

Earlier this month, the MAS projected core inflation at 1.5%-2.0% for 2026 and 1.5%-2.5% for 2027.

why it matters

For markets, the path of Singapore's inflation matters because it shapes expectations for MAS policy and the Singapore dollar. If imported price pressures ease more slowly, the timing of any policy easing becomes harder to judge.

market impact

SGD and Singapore rates: higher inflation risk may shift expectations for MAS policy

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