The Monetary Authority of Singapore (MAS) announced on Wednesday that it will maintain its current policy stance, opting to keep the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) band unchanged. This decision follows previous ease measures taken in the last two policy meetings. Additionally, the width and center of the band will remain the same, with MAS highlighting potential risks from U.S. tariffs as a consideration in their decision. The central bank affirmed it is well-positioned to address any risks that might impact medium-term price stability.
Looking ahead to economic conditions, GDP growth is anticipated to decelerate in the second half of 2025, following a robust start to the year. Trade-related sectors may experience a slowdown, while sectors such as construction and certain areas within financial services could benefit from increased infrastructure investments and more favorable financial conditions. Nonetheless, uncertainty looms over growth prospects, particularly as the economy moves into 2026. In terms of inflation, cost pressures are expected to remain manageable in the near term, with a slight increase in MAS core inflation predicted later in 2025. For the entire year, forecasts suggest that both core and headline inflation will range between 0.5% and 1.5%.
