Slowing growth and inflation in Singapore to prompt further policy easing: Credit Suisse

SINGAPORE (May 10): Credit Suisse economist Michael Wan sees another round of policy easing by the Monetary Authority of Singapore by next year on expectations that inflation in the city state will weaken below the government’s forecast range of 0.5%-1.5% for 2016.

Based on his forecasts, core inflation will average just 0.4% over this year and next. “Already, MAS has eased to a neutral policy in April even though it was expecting core inflation to come in at the lower half of its forecast range,” writes Wan in a May 10 note.

The weakening inflation stems from further deterioration in Singapore’s growth and employment. Faltering domestic demand has squeezed investment commitments, which fell 3% in 2015 compared to a decline of 2.4% in 2014.

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