- MAS maintains current Singapore monetary policy stance in Oct 2024.
- Singapore’s GDP growth projected to be around 2-3% for 2024.
- Core inflation expected to average between 2.5%-3.0% for 2024.
Singapore’s economy shows resilience amid global uncertainties, as the Monetary Authority of Singapore (MAS) keeps its policy unchanged.
Key Terms Simplified
- Monetary Policy is how a country’s central bank manages money supply and interest rates.
- GDP (Gross Domestic Product) is the total value of goods and services produced by a country in a year.
- Core Inflation is the rise in prices of goods and services, excludes accommodation and private transport.
- Year-on-year (y-o-y) growth compares this year’s performance to the same time last year.
MAS Maintains Current Singapore Monetary Policy
On 14 October 2024, the Monetary Authority of Singapore (MAS) released its latest Monetary Policy Statement.
The MAS decided to keep its current policy unchanged in October 2024.
This means the Singapore dollar will continue to strengthen gradually against other currencies.
The decision aims to support economic growth while keeping prices stable.
Singapore’s Economic Outlook
Singapore’s economy is showing signs of strength in 2024.
The MAS expects GDP growth to be around the upper end of the 2-3% forecast range.
This growth is supported by a strong manufacturing sector, especially in electronics.
The Ministry of Trade and Industry (MTI) reported that the economy grew by 4.1% (year-on-year) in the third quarter of 2024.
| Economic Indicator | 2024 Forecast | 2023 Actual |
|---|---|---|
| GDP Growth | 2-3% | Not provided |
| Core Inflation | 2.5-3.0% | 4.2% |
| CPI-All Items Inflation | Around 2.5% | 4.8% |
Inflation Trends in Singapore
Inflation in Singapore is showing a downward trend.
The MAS reports that core inflation dropped to 2.6% (y-o-y) in Jul-Aug 2024, lower than the 3.0% seen in the second quarter.
For the whole of 2024, core inflation is expected to average between 2.5% and 3.0%.
This is a significant decrease from 4.2% in 2023.
Factors Influencing Economic Performance
Several factors are shaping Singapore’s economic landscape:
- Strong performance in the manufacturing sector, particularly electronics
- Stable economic conditions among major trading partners
- Gradual moderation of global inflation
- Potential risks from geopolitical tensions and trade conflicts
Labour Market and Wages
The labour market in Singapore remains a key area of focus.
In 2023, Singapore workers saw wage growth despite economic challenges.
For 2024, the MAS warns that unexpected increases in labour demand could impact service price inflation.
This situation is closely linked to overall economic growth and inflation trends.
Risks and Uncertainties
The MAS highlights several risks to the economic outlook:
According to the MAS, “A sharp escalation in geopolitical and trade conflicts could exert sizeable drags on global and domestic investment and trade.”
This means that global issues could negatively affect Singapore’s economy.
The sustainability of the current upturn in electronics is also uncertain.
A global economic downturn could quickly reduce cost and price pressures in Singapore.
Future Outlook
The Monetary Authority of Singapore (MAS) believes its current policy will support medium-term price stability.
However, they remain vigilant to global and domestic economic developments.
The authority will continue to monitor inflation trends and economic performance closely.
Do you think the MAS’s decision to maintain its current monetary policy is the right move for Singapore’s economy in the current global climate?
