Singapore’s disinflationary path continues until ’25

Singapore’s disinflation trend is well entrenched, and the economy is predicted to keep recovering until 2025, the Monetary Authority of Singapore (MAS) said on Monday. However, it also warned of possible obstacles to development and price pressure.

In its latest macroeconomic review, MAS projected that core inflation would conclude the year around two per cent. For 2025, core inflation is anticipated to average around the midpoint of its 1.5-2.5 per cent forecast range.

While the risks to inflation are now more balanced compared to the previous quarter, the global economic landscape remains uncertain, with risks leaning towards lower global growth.

Despite leaving monetary policy settings unchanged in its previous review, MAS remains vigilant about persistent price pressures. Recent data showed that core inflation in September remained elevated, driven by healthcare and education costs.

The review highlighted several global risks that could impact Singapore’s economy, including trade tensions, geopolitical uncertainties, and a potential slowdown in China. The escalation of trade frictions could disrupt global trade and output, while also exerting upward pressure on prices.

However, Singapore’s economy is expected to continue expanding at a pace close to its potential rate. The country’s GDP growth for 2024 is projected to be around the upper end of the 2-3 per cent forecast range, with momentum likely to persist into 2025.

Attribution: Bloomberg

Subediting: M. S. Salama