Global economic growth has remained resilient at the turn of the year and is expected to hold steady in 2024. But inflation in advanced economies is still elevated and global interest rates are expected to remain high for longer.

In Singapore, GDP growth is expected to come in at 1-3% as the economy’s output gap narrows. MAS has continued to keep monetary policy at an appropriate restrictive stance, to lean against imported inflation and help curb domestic cost pressures. Patience and persistence are required at this last mile of disinflation and our expectations is for core inflation to step down more meaningfully from the fourth quarter of this year. We remain vigilant on the risks to the inflation outlook, including from geopolitical tensions, and extreme weather events which could result in further temporary supply-driven cost hikes. MAS is watching these and other economic and financial market developments closely.

On the regulatory front, MAS took further steps in the past year to strengthen its regulatory regime and oversight of the financial system, as well as to better protect customers when they deal with Financial Institutions (FIs) and service providers. For instance, the Financial Institutions (Miscellaneous Amendments) Act was amended to enhance MAS’ ability to enforce its regulatory regime and supervise capital markets financial institutions more effectively. Digital Payment Token service providers will be required to safekeep customers’ assets in a statutory trust from October this year, in line with international standards on regulating crypto assets, and crypto platforms will need to have proper segregation and custody of customer’s assets. The scope of the Guidelines on Fair Dealing was expanded to apply to all FIs, and to all products and services offered by FIs to customers. This helps to ensure that customers are provided accurate product representations and suitable recommendations.

To strengthen banks’ ability to combat money laundering/terrorism financing, MAS launched the Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases (COSMIC) in April 2024. It is the first centralised digital platform to facilitate sharing of customer information among financial institutions to combat money laundering, terrorism financing and proliferation financing globally. In its initial phase, six major commercial banks in Singapore can securely share information on customers who exhibit multiple “red flags” with one another, making it easier to detect and thereby deter criminal activity. This is yet another step in our efforts to strengthen Singapore’s capabilities to combat financial crime, uphold our reputation as a well-regulated and trusted financial centre and foster a high-quality ecosystem.

The financial sector continues to be an important driver of growth for the Singapore economy. In Q1 2024, the sector grew by 7.0% y-o-y, driven by broad-based growth across major segments, in particular from insurance, payments, banking and fund management. For example, assets under management for the asset management industry grew 10% year-on-year to reach S$5.4 trillion as at 31 Dec 2023. MAS will continue to develop the financial sector’s capabilities in emerging growth areas, to connect global markets, support Asia’s development and serve Singapore’s economy.

First, we are expanding global payments connectivity via bilateral and multilateral payment systems linkages. Building on the earlier instant payment linkages with Thailand’s PromptPay and India’s UPI, MAS launched additional linkages between Singapore’s PayNow and Malaysia’s DuitNow as well as the cross-border quick response payment linkage between Indonesia and Singapore at last year’s Singapore Fintech Festival. In the next stage, MAS is working with the Bank for International Settlements Innovation Hub Singapore and the central banks of Indonesia, Malaysia, Philippines, Thailand and India to connect our domestic instant payment systems on a multilateral basis. This will bring greater convenience for users and travellers, and represents yet another step towards realising ASEAN’s vision for regional payments interconnectivity.

We are developing a vibrant sustainable finance ecosystem in Singapore to support Asia’s transition. More than 20 financial institutions have set up their Asia Pacific sustainability hubs in Singapore. We are also ASEAN’s largest market for green bonds and loans – more than S$30 billion worth of green, social, sustainability and sustainability-linked bonds and loans originated from Singapore in 2022. Our strength as a leading sustainable finance centre allows us to push ahead in leading change and seeding innovative sustainability solutions to close financing gaps. This includes the Financing Asia’s Transition Partnership (FAST-P) blended finance initiative and the launch of a Transition Credits Coalition (TRACTION) with industry partners to test the use of high integrity transition credits. MAS will continue to work closely with the Singapore Sustainable Finance Association, industry bodies, academia and other stakeholders to further develop the sustainable finance ecosystem. More details on MAS’ initiatives across regulations, disclosure requirements, ecosystem development and FinTech to catalyse Asia’s net zero transition and decarbonisation activities in Singapore can be found in MAS’ FY23/24 Sustainability Report issued on 4 July.

To do all of these well and achieve our ambitions, we need a skilled and adaptable workforce. MAS will continue to work closely with the Institute of Banking and Finance (IBF), the financial industry, as well as tripartite partners to nurture young talents and leaders in finance, and equip our workforce with skills that are relevant to emerging trends and to capture growth opportunities, including in sustainability and Artificial Intelligence (AI). In April this year, we launched the Sustainable Finance Jobs Transformation Map (JTM), which shed light on how key sustainability trends were transforming job roles in the sector, and the new skills required of our finance professionals. To support the sector’s upskilling needs, IBF is working with industry and training partners to enhance the availability of relevant sustainability-related training courses. The newly launched IBF Sustainable Finance Skills Badge will serve as an industry benchmark for skills recognition and career mobility in this area. Separately, MAS and IBF have also commissioned a study on Generative Artificial Intelligence (Gen AI) and its impact on jobs in the financial sector. This will enable us to take steps to further upskill and reskill the workforce to support FIs’ increasing use of Gen AI to improve productivity, develop new ideas and create value. Results and recommendations for this study will be released next year.

On the organisational front, MAS welcomed a new Board Member, Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance in June 2024 and a new Managing Director (MD), Mr Chia Der Jiun, in January 2024. I look forward to working closely with them. On behalf of the Board, I would also like to take this opportunity to express our deep appreciation to MAS’ former MD, Mr Ravi Menon, for his significant contributions to MAS as MD over 12 years across monetary policy, financial supervision, and financial centre development. As MAS’ longest serving MD, Mr Menon played a pivotal role in making Singapore’s financial sector more resilient, digital and innovative, and sustainable. We also bade farewell to our former Chairmen, President Tharman Shanmugaratnam and Prime Minister Lawrence Wong, who have steered and supported MAS over the years. Their leadership and guidance have left an indelible mark here in MAS. I would like to extend my gratitude as well to former board member, Prof Tan Chorh Chuan for his active contributions to MAS’ board discussions and to the Board Risk and Audit Committees.

I also thank all staff and our partners, for working together to promote sustainable, non-inflationary economic growth, and to build an inclusive, innovative, and dynamic international financial centre.

Gan Kim Yong
Chairman