MAS: Torn between strong growth and the inflation reality

Research evidence excerpt

MAS: Torn between strong growth and the inflation reality

Barclays | Singapore

which it is centred." We continue to estimate the width of the official SGD NEER policy band to

be +/-2%.

The "very slight" tightening notably appears to split the difference between market

expectations heading into the meeting for the MAS to stay on hold and raise the slope by

50bp. 13 of 18 economists surveyed in the Bloomberg survey1 had expected the central bank to

stand pat, including ourselves. However, we had noted that this was a close call, as the AI boom

continues to impart a solid lift to economic growth that could convince the MAS that a further

pre-emptive tightening was warranted – even if that growth might have a relatively milder-than-

usual impact on inflation pressures (see Singapore: MAS Preview – A close call between near-

term inflation and medium-term growth, 1 July 2026).

FIGURE 1. We estimate the MAS raised the slope of its official SGD NEER policy band by 25bp, to 1.25%

Jan-1999=100

Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Apr-26 Jul-26 Oct-26

Barclays SGD NEER Policy Band

Source: Bloomberg, Barclays Research

Torn between strong growth...

As we highlighted in the Singapore chapter of Emerging Asia: The Fed stoics – 2026 edition

(14 July 2026), there has historically been a close relationship between MAS's slope setting

and its output gap projections – which likely held sway in policymakers' considerations

and, we suspect, their macroeconomic modelling.

• The latest MAS policy statement noted that "the economy’s positive output gap is now

forecast to widen slightly in 2026, reflecting the above-trend growth outturns in the first half

of the year, as well as the expectation that overall GDP will be sustained at high levels in the