亚洲经济观察新加坡2026-11991476年没有收紧MAS

Date Asia Economic Notes Singapore: No MAS tightening in 2026 Junjie HuangEconomist+65-6423-6699 With the MAS approaching/having approached the end of its easing cycle in ourview, we have received queries on whether/when the central bank is going totighten monetary policy.We do not expect the MAS to do so in 2026, and thinkthat policy tightening is more of a 2027 story, if any, when core inflation onaverage is forecast to rise above the central bank’ssoft target.(Figure1)In thisreport, we look at the factors underpinning our view, including supply anddemand dynamics that may influence core inflation in 2026. Our baseline is that MAS would maintain the current policy settings over 2026 Historically,MAS had typically tightened during(i)robust external and/ordomestic demand; (ii) periods of increasing global commodity/oil prices; (iii) tightlabor market and high wage growth; and (iv) GST hikes. (Figure2) As we explainbelow, the first three factors are expected to moderate in 2026 in our baseline,and there are no further plans for GST increases after the 2-ppt hike recentlyimplemented over 2023-24. Growthis expected to settle at potential in 2026inthe 2-3% range from ~4% thisyear. The positive output gap should narrow to ~0% of GDP in 2026 from +0.5-1% in 2025. –We think it is unlikely that the MAS would want to tighten policy over 2026 tofurther derail growth momentum (qoq sa avg +0.9% in 2025, +0.5% in 2026),given Singapore’s economic priority of pushing for a “faster rate of growth”(than 2-3%) over the next few years. Real exports may taper to 3.4% in 2026from 7.5% this year (Figure3), alongside moderating global growth and fadingof frontloading effects. We also do not expect the AI boom to continueaccelerating at 2025’s pace. –The risks to growth are balanced in our view. On the upside, there could berenewed frontloading of trade if sectoral tariffs are imposed, especially inpharma. On the downside, risks to the AI growth story will propagate throughthe domestic economy fairly quickly, given that it has been one of the maindrivers for the outperformance so far. (Figure4,Figure5,Figure6) While we forecastcore inflationto increase to 1.7% in 2026 from 0.7% in 2025,this is mainly due to low base effects from this year.Sequentially, the averagemomentum in 2026 is +0.12% MoM, similar to +0.10% in 2025, thus theinflationary impulse is expected to be fairly limited.We expect the MAS to lookpast these short-term base effects and focus instead on underlying medium-termdrivers of inflation in policymaking. –Global commodity prices are expected to remain subdued per theWorldBank’s outlook, whileDBalso expects oil prices to continue falling, albeit at aslower pace than in 2025. 5 December 2025Asia Economic Notes –Domestically, we see PM Wong (also Finance Minister) being more amenableto subsidies and social assistance than previous FMs, which should keepadministeredprice(healthcare,education,public services)increasesrelatively contained over the horizon. –MAS’ own forecastsfor2026 (Figure7) show that the higher core inflationwould largely be driven by essential services, but we think future Budgetsmay include further subsidies, social assistance, and reforms that may offsetsomeof the upside pressures.For instance,the government recentlyannounced reforms to reduce the cost ofhealthcare insurancethat will kickin from 2026. Wage growthisexpected to moderate in 2026after a strong 2024 and 2025(Figure8Figure6), per the labor market outlook fromMAS,Ministry of Manpower,and surveys of private firms (Singapore Business Federation,Singapore NationalEmployers Federation). It is hard to see wage growth continuing at 2025’s pace,with an increasing share of businesses anticipating worsening conditions, risinglabor costs, and narrower profit margins.In other words, we expect wage growthto equilibrate on its own, thus dampening the upward pressure on aggregateprice levels, without the need for MAS to intervene by tightening monetary policy. Supply-side factors a greater influence on core inflation than demand-pull We do not expect strong demand-pull pressure on inflation as wagegrowthmoderates in 2026.Indeed, even in 2025 discretionary spending had not drivencore inflation up to a large extent (Figure9), despite robust wage growth and largersocial transfers of 0.5% GDP in theFY2025 budget(FY2024: 0.4%). Rather, retailsales data suggest that personal consumption growth may have been driven byluxury goods (including cars) instead of broad-based, mass-market retail. (Figure11) In turn, car sales could have been supported by lower borrowing costs,cheapEV imports, EV rebates, and to some extent the increase inPrivate Hire Vehicles. –That said, growth in Private Hire Companies has already begun to slow (seehereand here).EV rebates will begin to decline from next year, whilesurchargesfor ICE cars will increase,both of which will dampen carpurchases. –Continued strength in personal consumption expenditure could well depend