The Monetary Authority of Singapore (MAS) has once again eased its monetary policy in response to a dimming global growth outlook and a benign core inflation forecast. This decision coincides with the Ministry of Trade and Industry (MTI) revising Singapore’s GDP growth forecast for 2025 downwards to a range of 0% to 2%, a shift from the previous 1% to 3% estimate. The MAS anticipates core inflation to remain below 2%, with risks skewed towards the downside.
The decision by MAS reflects growing concerns over global trade headwinds, which are expected to impact Singapore’s export-driven sectors. The easing of monetary policy aims to support the economy amidst these challenges. “The risks to inflation are tilted towards the downside,” the MAS noted, highlighting the subdued inflationary pressures.
In contrast, China’s economic outlook appears more optimistic. According to a report by Maybank IBG Research, China’s exports surged by 12.4% in March, driven by supply chain diversification efforts. This rebound is expected to contribute to a 4.2% GDP growth in 2025. The diversification strategy has seen multinational corporations like Apple shifting production bases to countries such as India and ASEAN nations, including Thailand, Indonesia, and Vietnam, which have experienced significant increases in Chinese intermediate goods inflows.
The contrasting economic forecasts for Singapore and China underscore the varied impacts of global economic shifts on different regions. As Singapore grapples with external challenges, China’s strategic diversification efforts offer a path to sustained growth. The implications of these developments will likely influence regional economic strategies in the coming years.
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