Singapore’s central bank said recent monetary policy easings will support the economy and boost inflation over the next two years against a backdrop of weakening growth among the city-state’s key trading partners.
Earlier this month, the central bank unexpectedly eased its exchange-rate based monetary policy, its third easing in 15 months, to bolster growth.
In its half-yearly macroeconomic review released on Wednesday, the Monetary Authority of Singapore (MAS) said the latest easing, along with the government’s budget this year, provided appropriate support for the economy.
“Cumulatively, these policy recalibrations will help keep the level of real GDP close to its potential in 2016 and 2017,” the central bank said in the review.
“These moves will also ensure price stability over the medium term by providing a partial offset to disinflationary pressures, boosting CPI-all items inflation by an average of 0.7 percentage point per annum over the next two years.”