IMF Staff Completes the 2025 Article IV Mission to Singapore

IMF News, May 15, 2025

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Growth increased to 4.4 percent in 2024, from 1.8 percent in 2023, supported by an upturn in the global technology cycle.
Growth is projected to slow to 1.7 percent in 2025 due to the recent escalation of trade tensions and an associated spike in global policy uncertainty.
Headline inflation decreased to 1.5 percent in end-2024 and further to 0.9 percent in March 2025.
Headline inflation and Monetary Authority of Singapore (MAS) Core Inflation are forecast at 1.1 percent and 1.0 percent in 2025, respectively.
Staff notes a high degree of uncertainty around the forecast; risks to growth are firmly tilted to the downside, while risks to inflation are generally tilted to the downside but include potential upside from supply chain disruptions.

MAS appropriately loosened monetary policy in January and April 2025.
Given weak inflation, slowing growth, and emerging slack, staff sees scope for further monetary policy easing in the near term.
Policy guidance: MAS should remain vigilant and data dependent with respect to the speed and magnitude of easing in light of the large uncertainty and both upside and downside inflation risks.

The expansionary fiscal stance for FY2025 (April 2025-March 2026) is appropriate against the backdrop of slowing growth, increasing economic slack, and elevated downside risks.
Singapore has ample fiscal space to provide additional temporary and targeted support if downside growth risks materialize.
Staff recommends phasing out or better targeting currently untargeted transfers over the medium term.
Medium-term fiscal priorities identified: meet rising healthcare costs due to an aging population, scale up high-quality public infrastructure, and strengthen social safety nets.

Singapore’s financial sector remains sound and resilient, underpinned by well-capitalized and liquid banks.
Authorities’ regulatory and supervisory efforts have contained vulnerabilities from cross-border exposure, reliance on foreign exchange funding, residential and commercial real estate exposures, interconnectedness between banks and nonbank financial institutions (NBFIs), and exposures to relatively small segments of highly leveraged corporates and households.
Continued vigilance is warranted given the risk of a sharp tightening of global financial conditions.

Steady implementation of the authorities’ Forward Singapore initiative is welcomed, including:
- Enhanced paid parental leave to support young families.
- Enhanced grants for low-income first-time home buyers to improve housing affordability.
- Additional transfers to improve the retirement adequacy for low-income workers and retirees.
Introduction of temporary financial support for involuntarily unemployed individuals has helped strengthen social safety nets.
Government progress on helping workers to reskill and firms to adopt AI technologies is noted.

An IMF team, led by Mr. Masahiro Nozaki, conducted discussions on the 2025 Article IV Consultation from May 5 to May 15, 2025.
End-of-mission note: views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Staff will prepare a report, subject to management approval, for presentation to the IMF's Executive Board.
The IMF team thanked the authorities and counterparts for close collaboration and productive discussions.

IMF staff press release, May 15, 2025.