Source: The Straits Times, 6 October 2026
The IMF cost of living warning, issued on 6 October 2026, says that when food and energy prices jump, they keep rising faster than other prices and stay high, so essentials stay harder to afford long after the first spike. The Straits Times reported that the IMF had already raised its 2026 global inflation forecast to 4.7% in July, against 4.1% in 2025, after the war in Iran pushed up oil prices. This post answers the questions a Singapore household would ask: what the IMF found, whether it already shows in local prices, and what happens next.
The findings are Chapter 2 of the IMF's October 2026 World Economic Outlook, published on 6 October. The full report is due on 13 October.
The IMF looked at the cost-of-living crises of the past five years. It found that after a typical shock, the prices of necessities keep rising faster than the prices of other goods for more than a year, then stay high. In its words, people face "a lasting deterioration in the affordability of essentials". The Straits Times reported that wages have struggled to keep up.
Other findings in the chapter:
Prices for many commodities have been high for several years. Pandemic supply chain shortages came first. The war in Ukraine then disrupted supplies of energy and many food-related goods.
The Straits Times reported that the US-Israel war on Iran, which began in February 2026, sent energy and fertiliser prices sharply higher after a Gulf supply route was closed. The IMF said the damage from supply shocks like these lasts much longer than a few months of higher inflation.
MAS and the Ministry of Trade and Industry (MTI) announced on 23 September 2026 that MAS core inflation, which leaves out accommodation and private transport, rose to 2.2% in August 2026 from 2.0% in July. Human Resources Online reported that this was its highest level in about two years. Headline inflation, which covers all items, rose to 2.3% from 2.2%.
On a month-on-month basis, core prices rose 0.3% in August. Electricity and gas inflation held steady. The table shows what moved the other categories.
Our guide to the cost of living in Singapore shows where food, utilities and transport sit in a typical month's spending. Use the Singapore inflation rate calculator to check whether your last pay rise kept pace with these figures.
| Category | August 2026 against July | What MAS and MTI pointed to |
|---|---|---|
| Services | Rose faster | Airfares and point-to-point transport services cost more |
| Retail and other goods | Rose faster | Clothing and footwear, and personal care products |
| Food | Edged higher | Food services cost more, while non-cooked food inflation eased |
| Private transport | Slowed | Car prices rose by less than before |
| Accommodation | Unchanged | Rents rose at the same pace as in July |
| MAS core inflation | 2.0% to 2.2% | Services, retail and other goods, and food |
| Headline (all items) | 2.2% to 2.3% | Higher core inflation more than offset slower private transport inflation |
Spending on food and energy cannot be put off. The Straits Times reported that for working-class families, these necessities also take up a bigger share of each month's spending, so the same price rise takes a larger bite. The IMF said this kind of inflation pushes up poverty and income inequality.
Reuters reported that the IMF built a model that counts the higher inflation poorer households face. It found a gap of 0.8 percentage points against the standard inflation measure, which implies 23 million more people fell below the extreme poverty line from 2021 to 2024 than earlier estimates showed.
Use the grocery price calculator to build a monthly basket from SingStat's average prices and compare it with what you pay now.
The Straits Times reported that central banks around the world have started raising interest rates to fight inflation. Raising rates can help fight higher prices but tends to slow economic activity, and the paper noted that developing countries may not be able to afford that slowdown.
The IMF told governments to avoid broad subsidies and to give targeted, temporary transfers to the people who need them most. Reuters reported the IMF's estimate that price controls and lower consumption taxes can cost governments three to six times more than targeted transfers, and producer subsidies up to 22 times more. The IMF also said many low-income and developing countries cannot afford even targeted help, because global debt is high after repeated shocks since the pandemic.
The IMF publishes the full World Economic Outlook on 13 October 2026, with new figures for global growth and inflation forecasts.
For Singapore, MAS and MTI expect core and headline inflation to each average 1.5% to 2.5% for the full year 2026. They expect core inflation to stay elevated into 2027 and to ease more clearly from around mid-2027, as global energy prices ease. They also said:
MAS and MTI prepare a Consumer Price Developments report for each month. The August 2026 report was published on 23 September.
Use the emergency fund calculator with your current essential spending, since higher food and utility bills change the result.
The IMF said that after a food or energy price shock, the prices of necessities keep rising faster than other prices for more than a year and then stay high, so essentials stay harder to afford long after the first spike.
MAS and MTI announced on 23 September 2026 that MAS core inflation was 2.2% in August 2026, up from 2.0% in July and its highest in about two years. Headline inflation was 2.3%, up from 2.2%.
MAS and MTI said electricity and gas inflation held steady in August 2026 compared with July. They also said higher and volatile global energy prices are feeding into electricity, gas and transport costs.
MAS and MTI expect core inflation to stay elevated into 2027 and to ease more clearly from around mid-2027, as global energy prices ease. They forecast 1.5% to 2.5% for the full year 2026 and said the risks lean towards higher inflation.
This is general financial information for Singapore, not personal financial advice. Figures change, so verify current rates against the official sources above before acting. See our full disclaimer.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).