Alvin Tan on managing long-term inflation expectations

The Monetary Authority of Singapore (MAS), like other central banks, will continue to focus on stabilising near-term inflation and price expectations as these weigh heavily in the formation of longer-term inflation expectations, said Minister of State for Trade and Industry and MAS Board Member Alvin Tan. Replying to an MP’s questions in Parliament on Monday (Mar 20), he pointed out that multiple factors will influence the path of global, regional and domestic inflation over the longer term. These include demographics, technological advances that impact productivity, future trends in globalisation, as well as the commitment of central banks to ensure low and stable inflation in their economies. Mr Tan said there is uncertainty and a significant diversity of views among central bankers, academics and analysts on the likely inflation trends in the long term. He assured the House that MAS is closely monitoring and assessing these developments and is “unwavering” in its objective of securing price stability for sustainable growth. He added that available measures indicate that Singapore’s long-term inflation expectations remain “well anchored”.