Asia Pacific Economic Research

Research evidence excerpt

Asia Pacific Economic Research

y outlook. Our out-of-consensus forecasts expectations (J.P. Morgan: 8%oya, consensus: 9.3%oya).

include a swing to a goods trade surplus for Indonesia, a fur- However, the June drop followed solid average gains of 5.9%

ther decline in Thailand’s headline inflation in July and m/m in April and May, and IP’s 3m/3m momentum accord-

above-consensus 2Q26 GDP growth in the Philippines. ingly strengthened further from 17.1%ar to 25.9%ar (Figure

2).

MAS: More tightening, but in smaller doses

Figure 2: Singapore IPThe MAS bucked our and consensus expectations for a policy

%3m/3m, saar

hold, and further increased the slope of its S$NEER band. 60 Tech

However, the degree of slope adjustment was unusual, with Overall

the MAS characterizing it as “very slight”—the first such 40

slope increment. We believe this week’s “very slight”

increase likely reflects a 25bp increment, raising our estimate

of the policy band slope from 100bp to 125bp. 0

Ex tech, pharma

The very slight tightening in the policy stance was accompa- -20

2023 2024 2025 2026

nied by a hawkish shift in the statement’s tone, with the MAS

Source: DOS, J.P. Morgan

now expecting the economy to “grow at a firm pace in the

second half of the year”. The central bank now expects the Tech was the main swing factor, down 16% m/m, sa, with a

positive output gap to widen slightly this year instead of nar- roughly 20% drop across the semiconductor and infocomm

rowing slightly, as indicated in the April statement. segments. But despite the sharp pace of monthly decline, tech

IP’s 3m/3m pace held near cycle highs at 49.6% saar (vs

Despite maintaining its 2026 headline and core CPI forecasts 47.1% saar previously), consistent with the cluster’s typically