Singapore (VNA) - The Monetary Authority of Singapore (MAS) kept its exchange rate-based monetary policy unchanged on July 30 after easing twice earlier this year.
MAS' decision comes after Singapore's economy grew strongly in the first half of 2025 despite the negative impact of US President Donald Trump's tariffs. MAS also kept its forecast for 2025 core inflation, which excludes private travel and accommodation costs, unchanged at an average of 0.5% to 1.5%.
It also noted that despite uncertainty over the outlook, the global economy and Singapore’s domestic economy have been resilient thus far.
Singapore posted a year-on-year gross domestic product growth (GDP) of 4.3% in the second quarter of this year, following a 4.1% gain in the first three months – outperforming the Ministry of Trade and Industry’s forecast of 0% to 2% growth for the full year.
Meanwhile, core inflation came in at 0.6% in June on a year-on-year basis, the same level as May.
The economic resilience is mostly attributed to US importers booking larger quantities of goods than usual for the first half of the year to mitigate the potential cost increases associated with new tariffs. The strategy, called front-loading, boosted exports to unusually high levels during the period from many Asian countries, including Singapore.
However, most analysts believe that front-loading would start to fade in the second half of 2025 as importers would tap the stockpiles they had built in the first six months. Thus, exports and manufacturing output would trail the first-half performance, while inflation would remain mild at best.
Given the uncertainties, MAS will closely monitor global and economic developments, and remain vigilant to risks to inflation and growth.
MAS said the drag on global demand may also intensify as previously delayed US tariffs are implemented.
However, the risk of a sharp step-down in global growth in the near term has receded along with the general de-escalation in trade tensions as well as more benign financial conditions since April, it added./.
