An International Monetary Fund (IMF) team, led by Masahiro Nozaki, recently concluded its 2025 Article IV Consultation with Singaporean authorities and stakeholders. The discussions took place from May 5 to May 15, 2025.
In a statement following the talks, Mr. Nozaki noted that "Singapore’s economy recovered strongly in 2024," with growth increasing to 4.4 percent from 1.8 percent in the previous year. This was attributed to an upturn in the global technology cycle. Headline inflation decreased to 1.5 percent at the end of 2024 and further dropped to 0.9 percent by March 2025.
However, Mr. Nozaki highlighted concerns over recent trade tensions and global policy uncertainty which have weakened Singapore's economic outlook for 2025. Growth is projected to slow to 1.7 percent this year, while inflation is expected to remain low due to emerging economic slack and declining commodity prices.
"There is a high degree of uncertainty around this forecast," Mr. Nozaki stated, pointing out risks related to global trade tensions and financial conditions that could impact growth negatively.
The Monetary Authority of Singapore (MAS) has responded by loosening monetary policy in January and April of this year, with potential for further easing if necessary given weak inflation and slowing growth.
On fiscal matters, Mr. Nozaki remarked that "the expansionary fiscal stance for FY2025...is appropriate" given current economic conditions. He emphasized the importance of continued support for households and firms as well as infrastructure spending to bolster domestic demand.
Mr. Nozaki also addressed Singapore's financial sector resilience, noting that banks are well-capitalized with ample liquidity but warned about vulnerabilities due to potential tightening of global financial conditions.
The IMF welcomed Singapore's efforts under the Forward Singapore initiative aimed at supporting families and improving social safety nets through measures such as enhanced parental leave and housing grants.
The IMF team expressed gratitude towards the Singaporean authorities for their cooperation during these discussions.