Monetary Authority of Singapore survey shows economists see Singapore monetar...

** Monetary Authority of Singapore (MAS SP) survey shows economists see Singapore monetary policy remaining on hold at the January review**

• Economists predict Singapore's monetary policy to remain unchanged in January.
• Core inflation is expected to remain low, with forecasts of 0.7% in 2025 and 1.3% in 2026.
• Economic growth is projected to rise to 4.1% in 2025 before moderating to 2.3% in 2026.

Economists surveyed by the Monetary Authority of Singapore (MAS) anticipate that the country's monetary policy will remain unchanged in January. This expectation comes amid forecasts of stable core inflation and varying economic growth rates over the next few years. Core inflation is projected to be 0.7% in 2025 and 1.3% in 2026, figures that remain unchanged from previous surveys. These low inflation expectations suggest that the MAS may not see an immediate need to adjust its monetary policy stance, providing a stable environment for market participants.

The economic growth outlook presents a more dynamic picture. Growth is expected to accelerate to 4.1% in 2025, an upward revision from earlier forecasts, before moderating to 2.3% in 2026. This anticipated growth trajectory could influence various sectors differently. For instance, sectors tied to domestic consumption and infrastructure development might benefit from the initial growth spurt, while export-oriented industries could face challenges if global demand weakens in line with the projected slowdown in 2026.

The forecast for fourth-quarter GDP growth stands at 3.6% year on year, indicating a robust economic performance in the near term. This growth rate could support equities in sectors such as consumer goods and services, which are likely to benefit from increased domestic spending. However, the potential for a slowdown in 2026 may prompt some market participants to reassess their long-term positions, particularly in sectors sensitive to economic cycles.

In the currency markets, the Singapore dollar (SGD) could see limited volatility in the short term, given the expectation of unchanged monetary policy. However, traders may keep a close watch on any shifts in inflation or growth forecasts that could prompt a policy response from the MAS, impacting the SGD's valuation.

Overall, the current economic forecasts suggest a period of stability in Singapore's monetary policy, with potential implications for various asset classes. Market participants are likely to monitor these developments closely, adjusting their strategies as new data emerges.

Trader Insight:

• Some traders may consider monitoring the Singapore dollar (SGD) for any signs of volatility stemming from changes in inflation or growth forecasts.
• Market participants are watching consumer goods and services sectors for potential gains from robust GDP growth in the near term.
• Analysts note that traders are assessing risk in export-oriented sectors, given the projected economic slowdown in 2026.

Disclaimer: This is not trading advice. For informational purposes only.