DBS Group Research economists Radhika Rao and Chua Han Teng stress Singapore’s strong growth momentum, AI-related tailwinds and low inflation, but warn that higher Oil costs and supply chain disruptions could pressure consumers, exporters and manufacturers while MAS policy depends on Brent dynamics.

Risk-off moves and energy price exposure

"As a price taker that is highly dependent on energy imports, Singapore’s consumers and export-oriented firms will have to brace for higher electricity, transport-fuel, and shipping costs arising from the increase in global energy prices and supply chain disruptions, particularly if the Middle East conflict becomes protracted."

"We estimate around 7+% of the overall CPI basket would likely be directly impacted by higher energy prices."

"For now, imported price pressures should be dampened and contained by continued appreciation of the SGD nominal effective exchange rate, unless Brent crude oil prices spike further, which might complicate the MAS’s policy bias towards earlier tightening."

"Manufacturers are already facing capacity and supply chain constraints, as reflected in the sharper contraction in the supplier deliveries sub-index of the February manufacturing purchasing managers’ index at 49.6 – the lowest in about two years since early 2024."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)