This was the fourth time for the MAS to consecutively tighten the monetary policy this year, but the move was not as aggressive as widely expected, reports Xinhua news agency.

The Global Economics and Markets Research team of UOB (United Overseas Bank) said in a report that the majority of market consensus had expected a further rise in the slope of the policy band beforehand.

The MAS said in its newly-published Monetary Policy Statement that the policy shift, building on past tightening moves, will further reduce imported inflation and help curb domestic cost pressures.

The policy stance will help dampen inflation in the near term and ensure medium-term price stability, providing the basis for sustainable economic growth.

The MAS said that the global economy faces high inflation and lower growth next year.

Singapore’s GDP growth is projected to come in at 3 to 4 per cent in 2022. In 2023, the economy is forecast to grow at a pace that is below the trend, which could cause the current mildly positive output gap to reverse.

At the same time, MAS core inflation, which excludes the costs of accommodation and private transport, is expected to remain elevated over the next few quarters, with risks still tilted to the upside.

For 2022 as a whole, MAS core inflation is estimated to average around 4 per cent and CPI-All Items inflation around 6 per cent.

In 2023, taking into account all factors including the Goods and Services Tax increase, MAS core inflation is estimated to come in at 3.5-4.5 per cent on average over the year, and CPI-All Items inflation at 5.5-6.5 per cent.

The authority added that it will continue to closely monitor global and domestic economic developments amid heightened uncertainty on both the inflation and growth fronts.

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