SINGAPORE, July 21 (Xinhua) -- The International Monetary Fund (IMF) said Monday that it expects Singapore's growth to moderate as geopolitical tensions, trade fragmentation and a potential correction in artificial intelligence (AI)-related investment cloud the outlook, while higher energy prices continue to pose upside risks to inflation.
Against this background, IMF directors underscored the importance of continuing well-calibrated and agile policies to navigate external challenges and support inclusive growth, the IMF said in a statement after concluding the Article IV consultation with Singapore.
The executive directors have also welcomed Singapore's continued economic resilience in the face of elevated global uncertainties, supported by strong fundamentals, prudent policies, and ample buffers.
They agreed that the Monetary Authority of Singapore (MAS)'s current monetary policy stance remains appropriate, given a positive output gap, a gradually normalizing but still-tight labor market and the need to anchor inflation expectations.
The directors said MAS should remain data-dependent and stand ready to tighten policy further if second-round inflation pressures emerge.
The IMF also said Singapore's financial year 2026 budget strikes an appropriate balance between supporting structural transformation and maintaining macroeconomic stability. While Singapore has substantial fiscal space to respond to major shocks, any support in the event of adverse energy shocks should be targeted and temporary to avoid adding to inflationary pressures, it said. ■
