By Bing Hong Lok
SINGAPORE (Reuters) – Singapore’s economy will grow 3.6% this year, up from a previous forecast of 2.6% expansion, while monetary policy settings are expected to remain unchanged at an upcoming review in January, a survey by the central bank showed on Wednesday.
The median forecast of 25 economists surveyed by the Monetary Authority of Singapore expect growth of 3.1% in the final quarter of 2024 and 2.6% growth for the whole of 2025.
Last month, the trade ministry raised its GDP growth forecast for 2024 to 3.5% from a previous range of 2.0% to 3.0%, after third-quarter growth surpassed estimates at 5.4%.
A majority of economists surveyed expect the MAS to maintain its current monetary policy in its quarterly reviews in January, April and July.
The MAS left monetary policy settings unchanged in October even as growth picked up and inflation declined. It has not changed policy since a tightening in October 2022, which was the fifth tightening in a row.
Only 33% of those polled expect a loosening of monetary policy in January via a reduction in the slope of the Singapore dollar nominal effective exchange rate, or S$NEER, compared to 50% in September’s survey.
The central bank of trade-reliant Singapore sets the path of the policy band of the S$NEER, thus strengthening or weakening the local currency against those of its main trading partners.
Headline inflation for 2024 was seen at 2.5%, down slightly from 2.6% forecast in the September survey, while core inflation this year was seen at 2.8%, down from 2.9% seen previously.
Core inflation in the final quarter of this year was seen at 2.1% in the survey.
Core inflation fell to 2.1% in October from a year earlier, making it the smallest rise in almost three years.
The economists surveyed expect headline and core inflation in 2025 to both be in a range of 1.5% to 1.9%.
(Reporting by Lok Bing Hong; Writing by Xinghui Kok; Editing by Martin Petty)
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