MAS Policy Crossroads: Economists Clash on Early 2025 Moves Amid Easing Inflation

As Singapore's inflation eases, economists are locked in a heated debate over the Monetary Authority of Singapore's (MAS) policy stance for early 2025. With headline and core inflation both down in October, experts are divided on whether MAS will adjust its monetary policy or maintain the status quo. This article delves into the opposing views, their underlying rationales, and the potential implications for the Singapore economy.

UOB experts suggest a slight reduction in the slope of the S$NEER policy band by 50 basis points, citing easing inflationary pressures and a gradual return to price stability. They view this as a step to restore monetary policy neutrality, consistent with trend growth and y/y core inflation returning to desired levels. UOB expects core inflation to ease to 1.7% in 2025, supported by higher base effects and moderating cost pressures.

RHB, however, expects MAS to maintain its current policy parameters into 1H25, emphasizing the entrenched disinflation trend and manageable inflation risks. They project core inflation at 2.8% and headline inflation at 2.6%, citing muted inflationary trends across the region.

The differing views on the cyclical path of the S$NEER and its association with a positive rate of appreciation impact these policy recommendations. UOB believes that easing inflationary pressures and a gradual return to price stability may necessitate a slight reduction in the slope of the S$NEER policy band. In contrast, RHB expects MAS to maintain current policy parameters, highlighting the entrenched disinflation trend and manageable inflation risks.


Incorporating regional inflation trends and economic conditions into MAS's policy decision-making for early 2025 will be crucial. Singapore's domestic conditions, coupled with global geopolitical uncertainties, will shape MAS's stance on balancing price stability and economic growth. As the debate unfolds, investors and businesses alike await the MAS policy announcement, eager to understand how these adjustments will impact the Singapore economy in 2025.