Singapore MAS survey shows economists cut GDP, inflation forecasts and see more easing

A recent Monetary Authority of Singapore survey indicates economists have reduced Singapore's 2025 growth forecast to 1.7% from 2.6%, citing geopolitical tensions as a primary downside risk. Headline and core inflation forecasts for 2025 have also been lowered to 0.9% and 0.8% respectively. Consequently, nearly three in five respondents anticipate the MAS will further ease monetary policy settings next month, following similar moves in January and April.

Analysis

A recent Monetary Authority of Singapore (MAS) survey of 20 economists reveals a significant deterioration in Singapore's economic outlook, with the median forecast for 2025 growth revised downwards to 1.7% from 2.6% reported in the March quarter survey. This aligns with the government's earlier revision of its 2025 growth forecast to a range of 0% to 2%, attributed to the impact of U.S. tariffs. Concurrently, expectations for inflation in 2025 have also moderated, with median forecasts for headline and core inflation lowered to 0.9% and 0.8% respectively; this follows the MAS's April policy review where its own forecast for 2025 core inflation was adjusted to 0.5%-1.5%, and March's annual core inflation rate hit a more than three-year low of 0.5%. Reflecting these subdued growth and inflation prospects, almost three in five surveyed economists anticipate the MAS will implement further monetary policy easing at its review next month, building on the loosening measures already undertaken in January and April. Geopolitical tensions are identified by the economists as the primary downside risk to this outlook, whereas an easing of trade tensions represents the most cited potential upside.

Key Decisions for Investors

• Investors should anticipate continued dovish monetary policy from the MAS, which could pressure the Singapore dollar and favor sectors sensitive to lower interest rates, while reflecting a weaker growth environment.
• Portfolio allocations related to Singapore should be reviewed, considering the heightened downside risk from geopolitical tensions and the stated impact of U.S. tariffs, while also remaining prepared for potential positive shifts stemming from any de-escalation in trade disputes.
• Closely monitor upcoming MAS policy announcements, particularly next month's review, alongside key inflation and GDP data releases, as these will be critical indicators for Singapore's economic trajectory and market performance.