Singapore’s core inflation posted its softest rise since February 2021, coming in at 0.3% for August as services costs eased.

The figure — which strips out prices of private transport and accommodation — was lower than the 0.5% expected by economists polled by Reuters, and lower than the 0.5% seen in the month before.

Headline inflation in Singapore came in at 0.5%, down from the 0.6% in July.

The Monetary Authority of Singapore said that services inflation fell due to cheaper holiday expenses, airfares and inpatient services.

The largest driver of inflation in August came from private transport, as car prices rose while petrol prices dropped at a slower pace.

The MAS also kept its full-year inflation forecast for 2025 at between 0.5% and 1.5% for 2025, compared to 2.8% in 2024.

“Although the ongoing trade conflicts could be inflationary for some economies, their impact on Singapore’s import prices is likely to be offset by the disinflationary drags exerted by weaker global demand,” the MAS wrote.

Singapore’s easing inflation comes even as the city-state braces for weaker growth in the second half of the year, with the boost from front-loaded exports expected to fade.

The country had recorded better-than-expected GDP growth in the second quarter of 2025, expanding 4.3% and accelerating from 4.1% in the first three months.

Singapore’s Ministry of Trade and Industry now expects full-year growth of between 1.5%-2.5%, down from 4.4% in 2024.

The latest GDP forecasts from the Ministry of Trade and Industry expect full-year GDP to be between 1.5% and 2.5%, compared to the 2024 figure of 4.4%.

Earlier projections had put the range for this year’s GDP growth to be between 0% and 0.2%.

Josh Gilbert, market analyst at Israel-based investment firm eToro said in a note that inflation is no longer the worry it once was for policymakers, and the latest numbers reinforce the case for the MAS to loosen its monetary policy in October.

The MAS eased its monetary policy in January and April, but held in July. Unlike most central banks, it manages monetary policy by guiding the Singapore dollar within an undisclosed band against a basket of trading-partner currencies, rather than adjusting interest rates.

Gilbert added that this is even more important, with the boost from front-loaded exports fading. “Recent export data, including an abrupt fall in non-oil domestic exports, suggest the payback from front-loading is already underway, adding to downside risks [for growth]”

Singapore’s non-oil domestic exports plunged 11.3% year-on-year in August, a sharp reversal from the 1% rise expected from a Reuters poll of economists.