Economists anticipate policy easing in April rather than January due to US uncertainties.
As Singapore’s core inflation trends down, economists are predicting that the Monetary Authority of Singapore (MAS) will likely delay easing its monetary policy into 2025, with most expecting a move in April rather than January.
Inflation Outlook
Core inflation in Singapore is anticipated to fall below 2% by the end of 2024, a level that the MAS considers consistent with price stability. In October 2024, inflation reached 2.1%, marking the lowest level since 2021. Despite the improvement, there is caution around making policy adjustments too early.
Uncertainty Due to Trump’s Policies
A key factor influencing this decision is US President Donald Trump and his economic policies. Trump’s proposed tariffs, which could potentially be implemented as soon as January, have sparked concerns among economists that they might either worsen Singapore’s growth outlook or introduce inflationary pressures.
Economists are wary of the potential impact on global trade dynamics, especially if these tariffs disrupt supply chains or raise costs. As a result, most experts believe the MAS will wait to assess the full effects of these developments before altering its policy stance.
The MAS’s careful approach indicates a balanced outlook for 2025, where its easing decisions will depend on the unfolding geopolitical landscape and economic signals, particularly from the United States.
