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MAS’ next decision may say more about growth than costs

Published July 8, 2026 at 1:15 PM UTC

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The Monetary Authority of Singapore (MAS) is set to announce its quarterly monetary policy statement by the end of July, a decision that could be influenced more by the nation's economic growth than by inflationary pressures. In mid-April, amid escalating tensions in the Strait of Hormuz due to the US and Israel's conflict with Iran, MAS highlighted concerns over rising energy prices and potential cost-push inflation. However, as of July, core inflation remains steady at 1.4%, below economists' expectations of 1.6%. This suggests that inflationary pressures may not be as pronounced as initially feared. Economists anticipate that MAS will maintain its current policy stance, with 61.9% expecting no change in July. Notably, 38.1% now foresee a tightening of policy, up from 23.5% in the March survey. This shift is largely attributed to stronger-than-expected economic growth, particularly in the manufacturing sector, driven by robust demand for artificial intelligence technologies. If this growth trend continues, it could lead to demand-pull inflation, prompting MAS to adjust its policy to prevent the economy from overheating. In summary, MAS's upcoming decision may be more reflective of the nation's economic expansion than of inflationary concerns.