- What Is Inflation?
- What Causes Inflation in Singapore?
- How Is Inflation Calculated?
- How Much Is Inflation in Singapore?
- What Is Your Personal Rate of Inflation?
- How to Cope with Inflation in Singapore?
- How to Protect Your Money from Inflation?
Inflation is a reality of modern economies, affecting everything from daily groceries to housing costs. But what exactly is inflation? How does it impact your everyday expenses in Singapore? And most importantly, how can you prepare for it and minimise its effects on your finances?
Find all the answers in our detailed guide below.
To help you better understand inflation, we’ve also built a free Singapore Inflation Calculator, allowing you to calculate the value of money over time based on historical inflation rates.
What Is Inflation?
Inflation is the gradual increase in the prices of goods and services over time, reducing the purchasing power of money. As inflation rises, the same amount of money buys fewer goods and services.
For example
If a cup of kopi cost SGD 1.20 last year but now costs SGD 1.40, that’s a 16.7% increase due to inflation.
Inflation affects everything from groceries and transport fares to rent and wages, playing a key role in Singapore’s economy.
What Causes Inflation in Singapore?
Several factors contribute to inflation in Singapore:
- Demand-Pull Inflation – When demand for goods and services exceeds supply, businesses raise prices. For example, if more people want to buy private condos but there’s a housing shortage, property prices increase.
- Cost-Push Inflation – When production costs rise (e.g., wages, imported raw materials, transport costs), businesses pass these costs onto consumers through higher prices.
- Supply Chain Disruptions – Events like the COVID-19 pandemic, geopolitical conflicts, or climate-related disruptions can cause shortages, making products more expensive.
- Government & Monetary Policies – Economic stimulus measures, government spending, and monetary policy (such as changes in MAS exchange rate policy) influence inflation.
- Energy & Fuel Prices – Higher petrol, electricity, and gas costs impact transport, food production, and daily living expenses in Singapore.
How Is Inflation Calculated?
The inflation rate measures the percentage increase in the prices of goods and services over a given period.
Singapore’s Inflation Measure: The Consumer Price Index (CPI)
Inflation in Singapore is measured using the Consumer Price Index (CPI), which tracks price changes for a basket of essential goods and services such as food, housing, transport, and healthcare.
Formula for inflation rate:
Inflation Rate = ((CPI in Current Year - CPI in Previous Year) / CPI in Previous Year) × 100
For example
If the CPI was 105 last year and 110 this year: ((110 - 105) / 105) × 100 = 4.76%
This means the inflation rate is 4.76% for the year.
To make tracking inflation easier, we’ve created a free Singapore Inflation Calculator so you can see how inflation affects the value of your money.
How Much Is Inflation in Singapore?
Inflation in Singapore is monitored by the Monetary Authority of Singapore (MAS) and Singapore Department of Statistics, which release regular CPI reports.
Singapore’s Annual Inflation Rates (Past Decade)
| Year | Inflation Rate (%) |
|---|---|
| 2023 | 4.2% |
| 2022 | 6.1% |
| 2021 | 2.3% |
| 2020 | -0.2% |
| 2019 | 0.6% |
| 2018 | 0.4% |
| 2017 | 0.6% |
| 2016 | -0.5% |
| 2015 | -0.6% |
| 2014 | 1.0% |
Good to know
Singapore’s inflation peaked at 6.1% in 2022, the highest level in over fourteen years, before gradually declining.
What Is Your Personal Rate of Inflation?
While the national inflation rate provides an average, your personal inflation rate depends on your spending habits.
For example
If your monthly grocery bill was SGD 600 last year but is now SGD 660, your personal grocery inflation rate is: ((660 - 600) / 600) × 100 = 10%
This means your grocery costs have increased by 10%, even if the national inflation rate is lower.
Tip: Tracking your personal expenses helps you see how inflation affects your lifestyle and finances.
How to Cope with Inflation in Singapore?
Inflation can put pressure on household budgets, but these practical tips can help you manage rising costs:
- Cut Unnecessary Expenses – Reduce food delivery orders, subscription services, and impulse shopping to save more.
- Buy in Bulk & Use Discounts – Stock up on non-perishable groceries during FairPrice or Giant promotions. Use cashback credit cards and supermarket loyalty programs.
- Negotiate Bills – Call your telecom, power, and insurance providers to request better deals.
- Use Public Transport – With fuel prices rising, using the MRT, buses, or cycling can significantly cut costs.
- Consider Generic Brands – Supermarket house brands (e.g., FairPrice, Sheng Siong) are often 20-30% cheaper than branded items with similar quality.
How to Protect Your Money from Inflation?
Investing is one of the best ways to preserve your wealth against inflation. Here’s how Singaporeans can stay ahead:
- Shares & ETFs – Investing in SGX-listed companies, REITs, or ETFs helps your money grow faster than inflation.
- Real Estate – Properties in Singapore’s prime districts (Orchard, Marina Bay, Bukit Timah) tend to appreciate over time, providing a hedge against inflation.
- High-Interest Savings & Fixed Deposits – With interest rates rising, placing money in high-yield savings accounts (e.g., DBS Multiplier, OCBC 360, UOB One accounts) or fixed deposits can offer safer returns.
- Commodities & Gold – Investing in gold, silver, or commodities can help protect against inflation during uncertain economic periods.
- Government & Inflation-Linked Bonds – Singapore Savings Bonds (SSBs) and SGS Bonds adjust for inflation, ensuring your money retains its value.
Inflation isn’t just a global issue—it directly impacts your cost of living in Singapore. By understanding how inflation works and adjusting your spending, saving, and investing strategies, you can minimise its impact on your finances.
To help you track inflation and plan better, try our free Singapore Inflation Calculator and stay informed about how inflation affects your money over time
