Singapore’s central bank warns further supply chain strain could cause more price shock

From the Monetary Authority of Singapore, the country’s central bank:

  • Global inflation seen easing in 2023 as major c.banks withdraw policy accommodation and supply challenges addressed
  • However, global inflation outlook is subject to considerable uncertainty
  • Additional strains on supply chains could cause further price shocks
  • Singapore economic growth is expected to moderate further in 2023, in line with slowdown in its major trading partners
  • As of now, we expect neither a recession nor a stagflation in Singapore next year”
  • Effects of its four monetary policy tightening moves are still working their way through the economy and will continue to dampen inflation over the next 12 mths
  • to prevent further build-up in labour cost pressures, it is important that the inflow of non-resident workers continues unimpeded
  • closely monitoring any systemic risk to financial system arising from debt related stresses in corporate and household sectors
  • supervisors have stepped up engagement with banks on their asset quality, including adequacy of provisioning against possible asset quality deterioration
  • stress tests on balance sheets of SGX-listed firms show that most corporates would be resilient to interest rate and earnings shocks
  • stress tests by mas suggest most households should be able to service their debts even under scenarios of sharp interest rate hikes and significant income losses
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