Date: For Parliament Sitting on 27 February 2025

Name and Constituency of Member of Parliament

Mr Yip Hon Weng, MP, Yio Chu Kang SMC

Question:

To ask the Prime Minister and Minister for Finance in view of the recent easing of monetary policy stance to favour a more gradual appreciation of the Singapore dollar (a) how does the MAS assess the impact of this policy move on import prices, particularly essential consumer goods like food; and (b) what measures are in place to mitigate any adverse effects on consumers.

Answer by Mr Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, and Chairman of MAS:

1. Inflation has fallen since the peaks reached in 2022–23 during the global inflation shock. MAS Core Inflation fell below 2% y-o-y in November 2024, and has averaged 1.2% y-o-y in the months since. The pace of price increases has moderated across a wide range of goods and services, including food, retail goods, discretionary services like restaurant meals, and essential services like public healthcare. For instance, non-cooked food inflation averaged 1.2% y-o-y in H2 2024, compared to 3.6% over the same period a year earlier.  

2. MAS Core Inflation is forecast to ease further to 1.0–2.0% in 2025, from 2.8% last year. Singapore’s imported cost pressures are expected to be contained, given forecasts for favourable supply conditions in key food commodity markets and gradually declining global oil prices. The policy band for the Singapore dollar nominal effective exchange rate, or S$NEER, remains on a modest and gradual appreciation path even after the easing of the policy stance. MAS has assessed that this will ensure medium-term price stability. MAS continues to be vigilant and will carefully assess the impact of global and domestic developments in its quarterly monetary policy reviews. 

3. Although inflation, which is the rate of price increases, has come down, prices of many items have not. The Government recognises that households continue to face cost-of-living pressures, and is addressing these concerns on multiple fronts. The measures include diversifying supply sources, including for food, to prevent sharp domestic price increases in the event of country or region-specific disruptions. The Government has also increased cost-of-living support to Singaporeans, including in Budget 2025.

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