Delta poses threat on Singapore’s economy, central bank to stay put

The global spread of the more infectious Delta COVID-19 variant could possibly disrupt  Singapore’s economic recovery in the third quarter. The situation could potentially force the central bank to stay on hold with its policy.  

Majority of the economists polled by Reuters expected the Monetary Authority of Singapore to maintain its policy setting on October 14. Meanwhile, only two of the thirteen economists believed the MAS would follow other central banks in tightening and normalizing policy.

In a different poll, the median of 16 expected the economy to expand 6.6% this year. This was much lower than a 14.7% growth expectation in the previous quarter due to milder low base effects and stricter COVID-19 restrictions. Preliminary data will be released on Thursday.

Singapore reinstated several coronavirus constraints to give people more time to adjust living with the disease. The country has fully vaccinated 83% of its 5.45 million population.

Singapore’s core inflation rate reached a two-year high of 1.1% in August. However, economists projected prices to remain moderate in a short period before rising.