Remarks by Mr Chia Der Jiun, Managing Director, MAS, at the MAS Annual Report 2025/2026 Media Conference on 28 July 2026

SINGAPORE, 7 AUGUST 2026 —

1. Good afternoon and thank you for joining us today for the release of the MAS Annual Report for Financial Year 2025/2026. 2. I will cover updates across central banking, financial sector development and regulation, as well as key highlights of our financial performance. Recent Economic Developments 3. Let me begin by touching on recent economic developments and monetary policy. 4. Over the past year, the macroeconomic landscape has been shaped by successive shocks.

At the time of last year’s Press Conference, the global outlook was clouded by concerns that rising tariffs and trade policy uncertainty would weigh materially on growth. The subsequent outbreak of the Middle East conflict in late February 2026 introduced a new shock to the global economy. 5. In the face of these repeated shocks, the global economy has proved more resilient than expected. The impact of higher tariffs was cushioned by supply-chain reconfiguration.

Global trade and industrial production continued to expand, even as tariff rates remained elevated. The scale of energy supply disruption since March was large, but cushioned by inventories, and agile supply and demand adjustments. Energy markets rebalanced with elevated prices at the lower range of anticipated scenarios, limiting the drag on growth, but lifting the path of headline inflation.

Energy prices nevertheless remain elevated with risks to the upside from the renewed conflict in the context of lower global inventories. 6. The growth and resilience of the global economy was boosted by strong global AI investment. A surge in investment in data centres, chips and computing infrastructure and semiconductor capacity has supported a sustained expansion in global production and trade in electronic products.

This has shifted growth outturns upwards, especially for economies that are deeply embedded in global technology supply chains. 7. Singapore has been exposed to all these crosswinds. The Middle East conflict has had a discernible impact on some pockets of the Singapore economy. Energy-related sectors such as chemicals manufacturing recorded double-digit contractions in Q2. However, the drag from these sectors was more than offset by the surge in the technology-related sectors.

The Singapore economy recorded a strong 6% year-on-year growth in H1 2026, a step-up from the 5% growth in H2 2025. 8. Looking ahead, growth of the Singapore economy should stay firm for the rest of the year.

Most non-AI related sectors are likely to maintain a pace of growth that is close to trend. 9. Inflation has picked up from a low base and will step up further in the period ahead before easing in the second half of 2027. Domestic headline and core inflation was low at below 1.0% in 2025. In 1Q2026, core inflation was 1.4% and in Q2, this was 1.5%.

We expect this to step up further from July and stay elevated for the next few quarters, driven by higher fuel and imported goods prices offsetting moderating domestic cost pressures and dampening effects of some government subsidies. MAS Core and CPI-All Items Inflation are projected to average 1.5-2.5% in 2026, stay elevated in the first half of 2027 and ease discernibly in the second half of 2027. 10.

MAS’ monetary policy stance was also well-positioned at the start of the year. We maintained an appreciating stance in the second half of last year and again in January this year. This has helped to moderate the pick-up in inflation this year. In April, following the onset of the Middle East conflict, we tightened monetary policy in anticipation of rising imported inflationary pressures.

Since then, Singapore’s import prices for a range of energy and other commodity inputs have risen sharply and have started to pass through to domestic consumer prices. This April move has therefore placed monetary policy settings in a favourable position as we head into a stronger inflationary environment. 11. The latest July MPS was a carefully calibrated policy adjustment that builds on April's policy decision.

Inflation is forecast to step up further in July and stay elevated over the next few quarters before easing in the second half of 2027. The positive output gap is now expected to widen slightly, rather than narrow as envisaged in the April policy review. Taking the April and July decisions together, the stronger appreciation of the Singapore dollar will lean more effectively against the incoming inflationary pressures. 12.

Amid the uncertain economic environment, MAS remains vigilant to risks to the outlook and is well-positioned to respond to maintain medium-term price stability and curb excess volatility in the Singapore Dollar Nominal Effective Exchange Rate (S$NEER). Financial markets and financial stability 13. I will turn now to developments in the financial markets and risks to financial stability. 14. Global financial conditions have thus far been benign and supportive of economic activity.

Despite recent pullbacks, equity market valuations are high and credit spreads remain tight. 15. One major uncertainty to the benign picture thus far is the sustainability of the AI investment boom. Global growth, investment and financial market performance have become dependent on projections of large and increasing investment in data centres and semiconductor chips continuing well into the future. This is particularly so in the US and semiconductor-exporting Asian economies.

a) AI-driven electronics exports account for more than 70% of Asia's export growth year-to-date, up from 46% in 2024. b) AI-connected firms now account for around 40% of S&P 500 market capitalisation and more than 30% of the MSCI EM Asia Index. They also dominate new financing raised in US capital markets, representing around half of investment-grade bond issuance, 38% of high-yield issuance, and 87% of new venture capital funding. 16.

The sustainability of AI investments is thus consequential for global growth and financial stability. While near-term investments are supported by committed orders and strong hyperscaler cashflows, there is greater uncertainty around the sustainability of these investments in the medium term. In the race for model advantage and to scale adoption,… (AI-assisted rewrite, based on the original source)

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