An overview of the effects of monetary policy in Singapore on GDP and inflation, from 1990 to the present day.

% annual growth rate:

  M3 Nominal GDP
1990-2020 7.83% 6.96%
1990-2000 9.07% 9.59%
2001-2010 8.54% 7.11%
2011-2020 5.77% 3.92%

Sources: M3 from Monetary Authority of Singapore database and nominal GDP from IMF database, as at February 2022

The medium-term relationship between money and nominal GDP growth in Singapore, 1990-2020

Five-year moving averages of annual % changes, with 1992 being the start of the first five-year period

Comment on monetary trends in Singapore

Singapore became an independent country when it was ejected from the Malaysian Federation in 1965. Its first few years were characterised by instability and high levels of unemployment. The Singapore Dollar was initially pegged to Sterling, then briefly to the US Dollar and finally, for over a decade to a basket of currencies. Since 1985, Singapore's currency has been allowed to float more freely, although even now, the Central Bank, the Monetary Authority of Singapore, (which was established in 1971) controls monetary policy not by interest rates but by intervening in the exchange rate mechanisms.

Singapore saw high money growth both in the early 1990s and in the years leading up the Great Recession of 2008. Although affected by the Asian financial crisis of 1997, the country escaped a recession and money growth remained positive throughout. In common with other developed economies, the last decade has seen lower but stable M3 growth and low inflation