Monetary Policy Unchanged as Singapore Prepares for Quarterly Statements

The MAS will continue to maintain the prevailing rate of appreciation of the SGD NEER policy band, as it believes the current path of appreciation is sufficient. This sustained appreciation is necessary to control imported inflation and domestic cost pressures, which in turn ensures medium-term price stability.

In terms of specifics, there will be no changes to the width and the level at which the policy band is centered. However, the MAS did mention that it will closely monitor global and domestic economic developments, given the uncertainty surrounding both inflation and growth.

In addition to this announcement, the MAS revealed that starting from 2024, it will shift to a quarterly monetary policy statement schedule. These statements will be released in January, April, July, and October. The next statement is scheduled to be released in late January.

Overall, while the monetary policy remains the same, these quarterly statements indicate increased transparency and regular updates from the MAS. This move is seen as an effort to keep up with global economic changes and provide stakeholders with more timely information.

Singapore's Inflation Outlook

Core Inflation Forecast

Headline Inflation Projection

The MAS also provided insights on Singapore's headline inflation. It is anticipated to average around 5% in 2023, a slight decrease from the 6.1% experienced in 2022. As for 2024, headline inflation is projected to stay within the range of 3.0% and 4.0%.

Economic Growth Trends

Recent advance estimates from the Ministry of Trade and Industry indicate a positive trajectory for Singapore's gross domestic product (GDP). The third quarter recorded a quarter-on-quarter seasonally adjusted growth of 1.0%, an improvement from the 0.1% growth witnessed in the second quarter. The manufacturing sector played a significant role in driving this growth, while certain domestic-oriented sectors reported a slight easing in activity.

GDP Growth Outlook

Looking ahead to 2023, the MAS expects Singapore's GDP growth to fall within the lower half of the forecast range of 0.5%-1.5%. By 2024, growth is projected to move closer to its potential rate, with a slightly negative output gap that the central bank did not provide further details on.