Singapore's overall inflation for 2026 expected to rise amid ongoing Middle East conflict

Singapore's overall inflation for 2026 is expected to rise above the earlier projection of between 1 to 2 per cent because of the ongoing Middle East conflict.

Deputy Prime Minister Gan Kim Yong — who is also Trade and Industry Minister — told Parliament so on Tuesday (April 7) in his ministerial statement discussing the impact of the conflict on Singapore.

"The Middle East situation has driven up global energy and commodity prices, which will drive up global inflation. Consequently, we now expect Singapore's overall inflation for 2026 to be higher than earlier projected," he said.

@asiaone DPM Gan Kim Yong said on Tuesday (April 7) that Singapore must prepare for the longer-term impact from the Middle East conflict, including inflation, with households facing more expensive electricity, transport and daily essentials. #sgnews #Singapore #Parliament #MiddleEast #War #Economy #Inflation #Household ♬ original sound - AsiaOne

Separately, Coordinating Minister for National Security K Shanmugam and Acting Minister for Transport Jeffrey Siow are also delivering separate statements on the impact. 

This comes as 32 MPs have submitted 62 questions on the war's impact, including rising energy prices in the Republic, and the Government's response.

'Unprecedented' choking of oil and gas supply 

In his speech, DPM Gan pointed out that the closure of the Strait of Hormuz has caused an "unprecedented" choking of oil and gas supply and is "the worst disruption since the 1973 oil embargo".

Global energy supplies have been disrupted since Iran effectively blocked the Strait of Hormuz, a major trade passage, after coming under attack from the US and Israel on Feb 28.

The surging prices of Brent crude oil and liquefied natural gas (LNG) as well as associated products including fertiliser will result in higher costs for businesses, transport, shipping, food, and more.

@asiaone In his ministerial statement delivered in Parliament on Tuesday (April 7), DPM Gan Kim Yong set out how the ongoing Middle East conflict will affect Singapore's economy, and how some sectors will be more affected than others. #sgnews #Singapore #Parliament #MiddleEast #War #Economy #Growth #Businesses ♬ original sound - AsiaOne

"Many Asian currencies have weakened against a stronger US dollar, compounding inflation and growth risks in these countries," he said.

"All of these pressures could intensify further in the upcoming weeks."

The Government has convened the Homefront Crisis Ministerial Committee (HCMC) to address the energy crisis.

[[nid:733004]]

While Singapore's economic activity had continued to be resilient in the first quarter of 2026, GDP growth for the coming months is likely to be affected by the ongoing conflict.

DPM Gan said various industries including manufacturing, tourism and retail will likely face higher costs and weaker external demand.

"Taken together, these sectoral impacts will weigh on economic activity in the coming quarters, although the extent remains uncertain as the conflict is still unfolding," he added.

The Ministry of Trade and Industry (MTI) will continue monitoring developments and update the GDP forecast in May.

[[nid:732683]]

[email protected]

No part of this article can be reproduced without permission from AsiaOne.