东盟与中日韩宏观经济研究办公室（AMRO）：2023年新加坡经济磋商报告

2023/SVL/SG/01

AMROAnnualConsultation

Report

Singapore-2023

ASEAN+3MacroeconomicResearchOffice(AMRO)

July2023

ANNUALCONSULTATIONREPORT

SINGAPORE2023

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Acknowledgements

1.ThisAnnualConsultationReportonSingaporehasbeenpreparedinaccordancewiththefunctionsofAMROtomonitorandassessthemacroeconomicstatusandfinancialsoundnessofitsmembers;identifyrelevantrisksandvulnerabilities;reportthesetomemberauthorities;andifrequested,assisttheminmitigatingtheserisksthroughthetimelyformulationofpolicyrecommendations.ThisisbeingdoneinaccordancewithArticle3(a)and(b)oftheAMROAgreement.

2.ThisReportisdraftedonthebasisoftheAnnualConsultationVisit(ACV)ofAMROtoSingapore,whichwasconductedinSingaporefromMay9toJune5,2023(Article5(b)oftheAMROAgreement).TheAMROACVteamwasheadedbyDrKevinCheng,GroupHeadandLeadEconomist.TheACVmemberswereDrJadeVichyanond,CountryEconomistforSingapore;MrJustinLim,Back-upEconomistforSingapore;DrJiKe,Back-upEconomistforSingapore;andMsCatharineTjingYiingKho,SeniorEconomist.AMRODirectorDrKouqingLiandChiefEconomistDrHoeEeKhorparticipatedinkeypolicymeetingswiththeauthorities.TheAMROAnnualConsultationReportonSingaporefor2023waspeer-reviewedbyagroupofeconomistsfromAMRO’sCountrySurveillance,FinancialSurveillanceandFiscalSurveillanceteams;endorsedbythePolicyandReviewGroup;andapprovedbyChiefEconomistDrKhor.

3.TheanalysisinthisReportisbasedondataandinformationavailableupto16June2023.

4.Bymakinganydesignationoforreferencetoaparticularterritoryorgeographicalarea,orbyusingtheterm“member”or“country”inthisReport,AMROdoesnotintendtomakeanyjudgmentsastothelegalorotherstatusofanyterritoryorarea.

5.OnbehalfofAMRO,theACVteamwishestothanktheSingaporeanauthoritiesfortheircommentsonthisReport,aswellastheirexcellentmeetingarrangementsduringourvisit.

Disclaimer:Thefindings,interpretationsandconclusionexpressedinthisReportrepresenttheviewsofthestaffofASEAN+3MacroeconomicResearchOffice(AMRO)andarenotnecessarilythoseofitsmembers.NeitherAMROnoritsmembersshallbeheldresponsibleforanyconsequenceoftheusefromtheinformationcontainedherein.

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TableofContents

Acknowledgements 1

ExecutiveSummary 3

A.RecentDevelopmentsandOutlook 5

B.Risks,Vulnerabilities,andChallenges 12

BoxA.HouseholdBalanceSheets 14

C.PolicyDiscussionsandRecommendations 16

C.1ChartingaPathTowardsFiscalSustainability 16

BoxB.BudgetaryImplicationsofSingapore’sLonger-termSpendingNeeds 17

C.2CalibratingMonetaryPolicyAmidHeightenedInflation 18

C.3PreservingFinancialStabilityinUncertainGlobalConditions 19

C.4SpearheadingStructuralReformstoBoostSustainableGrowth 20

Appendices 22

Appendix1.SelectedCharts 22

Appendix2.SelectedEconomicIndicatorsforSingapore 26

Appendix3.BalanceofPayments 27

Appendix4.GeneralGovernmentBudget 28

Appendix5.DataAdequacyforSurveillancePurposes:aPreliminaryAssessment 29

Annexes:SelectedIssues 30

1.Singapore’sPrivateResidentialPropertyMarket:RecentDevelopmentsandPolicy

Implications 30

2.ChallengesandOpportunitiesontheGreenTransitionPath 34

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ExecutiveSummary

Weighedbyaweakeningglobaleconomy,Singapore’seconomyisexpectedtogrowatamoderatepacein2023.Withinflationmoderatingbutstilllikelytobeelevatedinthenearterm,maintainingatightmonetarypolicystanceiscriticalinanchoringinflationaryexpectations.Continuedfiscalconsolidationiswarrantedinviewofrisingexpenditureneeds,whiletargetedfiscalsupportisbeneficialforeasingtheincreaseinthecostofliving.

1.Singapore’sgrowthmomentumhasmoderatedinthefaceofstrongexternalheadwinds.

Afterreboundingby8.9percentin2021,Singapore’sgrowthslowedto3.6percentin2022and0.4percent(yoy)inQ1thisyearasexternalheadwindsmounted.Inparticular,themanufacturingsectorweakenedsharplyasgoodsexportsfell.Theservicesectorremainedstrong,thankstothereturnoftouristsaswellasrelativelyresilientprivateconsumption.Theconstructionsectorcontinuedtorecoverasthereturnofforeignlaborfollowingthereopeningeasedthesupplyconstraint.

2.Lookingahead,growthisexpectedtobesubduedonthebackofweakerglobalgrowthprospects.Non-trade-relatedservicesareexpectedtobenefitfromcontinuedgrowthininboundtourismandresilientdomesticconsumptionwhiletheconstructionsectorwilllikelycontinuetorecovertowardspre-pandemiclevelsasmanpowershortagescontinuetoease,andbuildingmaterialcostsmoderate.However,theirpositiveimpactongrowthwilllikelybemorethanoffsetbyaslumpingmanufacturingsectorandlacklusterperformanceintrade-relatedservices,reflectingtheslowdowninglobaltrade.

3.Inflationstoodat6.1percentin2022,onthebackofhighercostsofprivatetransportandaccommodation,aswellaselevatedenergyandfoodprices.Althoughinflationhasmoderatedinthefirsthalfof2023,itisexpectedtoremainelevatedinthenearterm,asserviceinflationremainsfirm,reflectingarelativelytightlabormarket.

4.Afterarobustrecoveryin2021,growthinnon-oildomesticexportsslowedto3percentin2022,followingaslowdowninthegrowthofbothelectronicsandnon-electronicsexports.

Singapore’sexportperformanceremainedanemicintheearlypartof2023owingtoweakexternaldemand.Exportsofservices,ontheotherhand,continuedtogrowrobustly,boostedmainlybyhigherreceiptsfromtransportandtravelservices.

5.Amidheightenedinflationarypressureandrisingglobalinterestrates,SingaporetightenedmonetarypolicyfiveconsecutivetimessinceOctober2021beforedecidingtomaintaintheprevailingrateofappreciationoftheS$NEERpolicybandinAprilthisyear.Thepausecameamidtheprojectedeasingofinflationbyend-2023andconcernsoverthemarkedslowdownindomesticgrowth.Meanwhile,domesticinterestrateshavebeentrendingupwardsintandemwithglobalinterestrates.

6.TherevisedFY2022fiscalpositionimprovedslightlyrelativetotheestimatedposition,mainlyduetohigher-than-expectedrevenue,whiletheFY2023budgetshowsatighterstance,reflectingcontinuedcommitmenttowardconsolidation.FinancialsupportforhouseholdswasenhancedtohelpshoulderthehighercostoflivingandcushiontheimpactoftheGSTrateincrease.

7.Theoverallbalanceofrisksistiltedtothedownside,withagloomierglobalgrowthoutlookbeingoneofthemajorrisksinthecomingquarters.WhilethereopeningofChinahadinitiallyprovidedamuch-neededboosttoglobaldemand,itwillunlikelybesufficienttooffsettheimpactoftighterfinancialconditionsinmajoreconomies,whichwillweighheavilyonSingapore’smanufacturingexports.

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8.Elevatedpricepressureposesanotherchallengeinthenearterm.AsharpriseincommoditypricesremainsasanexternalriskamidheighteninggeopoliticaltensionsandElNinoweatherpatterns,whilecarownershipfees,accommodationcosts,wagepressure,andtheimpactofGSThikeswarrantmonitoringonthedomesticfront.

9.Onthefinancialfront,episodesofcapitalflowvolatilityareakeyriskforSingapore.

ConsideringrecentturmoilintheU.S.andEuropeanfinancialsystems,Singaporemayalsobesusceptibletorenewedupsurgeinriskaversioninglobalfinancialmarkets,especiallygiventhecountry’spositionasaninternationalfinancialcenter.Meanwhile,mosthouseholdsandfirmsremainresilienttoanincreaseindebtservicingcosts,althoughrisksforasmallsegmentofhighlyleveragedhouseholdsandfirmshaveheightenedamidhigherinterestrates.

10.TherevenuemeasuresintheFY2023budgetarecommendable.AMROalsosupportseffortstomaintainfiscalprogressivityontherevenueside,suchastheincreaseinstampdutiesforhigher-valuepropertiesandintheregistrationfeesforluxurycars.AMROencouragestheauthoritiestoexploreadditionalrevenuesourcestomeetlonger-termspendingneedswhileadheringtothefiscalruleofrunningabalancedbudgetwithineachtermofgovernment.

11.AMROsupportsMAS’tighteningofmonetarypolicytomaintainpricestability.Lookingahead,inflationarypressureisexpectedtoremainelevatedintheneartermwiththetightdomesticlabormarketandothersupplyconstraints.Hence,monetarypolicyshouldremaintight,andMASshouldbepreparedforfurthertightening.Meanwhile,aconcertedeffort,involvingmonetaryandotherpolicyinstruments,shouldbemadetotameinflation,particularlywheninflationarypressureisbeingdrivenbyawiderangeofsupplyanddemandfactors,includingdomesticpolicymeasures.

12.InlightoftherecentbankingturmoilintheU.S.andEurope,wecommendtheauthorities’continuedeffortsinsafeguardingSingapore’sbankingsystem.TheMAS’regularconductofstresstestsagainstvarioustypesofrisks,closemonitoringofglobalfinancialmarkets,readinesstoprovideliquiditythroughvariousfacilities,andclearcommunicationwithmarketparticipants,arecrucialinhelpingensurethecountry’sbankingsystemcontinuestoremainresilientinthefaceofunexpectedshocks.

13.AMROsupportsthecurrentmacroprudentialmeasurestocoolthepropertymarket.Therecentroundsofcoolingmeasureshavereducedtheriskofadestabilizingcorrection.Continuedvigilanceofpropertymarketdevelopmentsisessential,asareeffortstoboostprivateandpublichousingsupply.

14.AMROsupportstheauthorities’continuedeffortstodeveloparesponsibleandinnovativedigitalassetecosystem.Theeffortstostrengthendigitalinfrastructurewillfostercollaborationbetweenfintechcompaniesandotherbusinesses,whilefacilitatinggreaterinteroperabilityacrossplatformsandcountries.AMROalsowelcomestheauthorities’initiativestomobilizeprivatecapitaltocatalyzetheregion'stransitiontowardsalowcarboneconomy.

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A.RecentDevelopmentsandOutlook

1.Singapore’sgrowthmomentumhasmoderatedasreopeningtailwindshavesubsidedandexternalheadwindsremainstrong.Afterhavingreboundedby8.9percentin2021,Singapore’seconomicgrowthslowedto3.6percentin2022and0.4percent(yoy)inQ1thisyearinthefaceoftheweakeningglobalgrowthmomentum(Figure1).Themanufacturingsector’sperformance,inparticularelectronicproducts,weakenedmarkedly,havinggrownby2.5percentin2022beforecontractingby5.4percent(yoy)inQ12023amidslowingexternaldemandandacyclicaldownturnintheelectronicscycle(Figure2).Theservicesectorhasremainedstrong,expandingby4.8percentin2022and1.9percent(yoy)inQ1thisyear,thankstothereturnoftourists,largelyfromwithintheAsia-Pacific,aswellasrelativelyresilientprivateconsumption.Theconstructionsectorhascontinuedtorecover,growingby6.7percentin2022and6.9percent(yoy)inQ12023,asthereturnofforeignlaborfollowingthereopeningeasedsupplyconstraints.

Figure1.GDP

Source:DepartmentofStatistics;CEIC;AMROstaffcalculations

Figure2.IndustrialProduction

Source:DepartmentofStatistics;CEIC;AMROstaffcalculations

2.Lookingahead,growthisforecasttobesubduedonthebackofweakerglobalgrowthprospects.Non-trade-relatedservicesareexpectedtobenefitfromcontinuedgrowthininboundtourismandresilientdomesticconsumption—thoughthelattermaybesomewhatrestrainedbystill-elevatedconsumerpriceinflationandthehigherinterestrateenvironment—whiletheconstructionsectorwilllikelycontinuetorecovertowardspre-pandemiclevelsasmanpowershortagescontinuetoeaseandbuildingmaterialcostsmoderate.1However,theirpositiveimpactongrowthwilllikelybemorethanoffsetbyaslumpingmanufacturingsectorandlacklusterperformanceintrade-relatedservices,reflectingaslowdowninglobaltradeamidstincreasinglytightermonetaryconditionsinkeyglobaleconomiesaswellastheelectronicsdowncycle.TheboostfromChina’sreopeningmaytakesometimetomaterialize,giventhatithasthusfarbenefitedmainlythecountry’sowndomestic-orientedservicessector.WeexpectSingapore’sgrowthtomoderatetoaround1.3percentin2023.

1However,thereisstillshortageofhigh-skilledworkers,whichisexpectedtopersistinthenearterm.

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3.Inflationrosesignificantly,averagingaround6.1percentin2022,andisexpectedtoremainelevatedinthenearterm.Singapore’sheadlineinflationrosefrom4.0percent(yoy)inDecember2021toahighof7.5percentinSeptember2022,beforemoderatingto4.5percentinJune2023(Figure3).Twoofthemaindriverswerecarownershipcostsandaccommodationcosts;in2022,thepricesofCertificatesofEntitlement(COEs)rosebyaround63percent,whileprivateresidentialrentalcostsrosebyabout20percentonaverage.2Furthermore,thecontributionfromserviceinflationgainedmomentumoverH22022andremainedfirminH1thisyear,reflectingarelativelytightlabormarketandtheexpansioninthecoverageoftheProgressiveWageModel.3Weexpectaverageheadlineinflationtoregisterataround5.8percentin2023,withaveragecoreinflation(excludingprivatetransportandaccommodationcosts)hoveringatanelevated4.6percent,largelyonthebackofhigherlaborcosts.

Figure3.Inflation

Source:DepartmentofStatistics,MAS;AMROstaffcalculations

Figure4.JobVacancies

Source:ManpowerResearch&StatisticsDepartment,MinistryofManpower;AMROstaffcalculations

4.Thelabormarkethasbeenrelativelytight,butlabordemandmaymoderateintheneartermamidmoderatinggrowth.Theseasonallyadjustedoverallunemploymentratecontinuedtodecline,to1.9percentinJune2023fromahighof3.5percentinOctober2020.Followingtherelaxationofborderrestrictions,employersbackfilledvacanciesthatrelymoreonforeignworkers,easinglaborshortagestotheextentthatresidentandnon-residentemploymentexceededtheirpre-pandemiclevelsby4.9percentand1.7percent,respectively,asofMarch2023(Figure4).Whiletherearesignsthatlabordemandiscoolinginsomesectors,theratioofjobvacanciestounemployedpersonsisstillrelativelyhigh,at2.3inMarch2023,comparedtothepre-pandemiclevelof0.9inDecember2019.

5.Non-oildomesticexports(NODX)slowed,reflectingweakeningdemandintradingpartners.Aftergrowingat12.1percentin2021,NODXgrowthslowedto3percentin2022,followingaslowdowninthegrowthofbothelectronicsandnon-electronicsexports(Figure5).Intermsofexportmarkets,NODXtoChinaandHongKongcontractedin2022asstringentCOVID-19containmentmeasuresdisruptedproductioninbotheconomies.4WeakdemandintheseeconomieswascompoundedbyweakeninggrowthintheU.S.andE.U.,andaprotractedglobalsemiconductordowncycleinthelastquarterof2022.NODXcontracted

2Carpricesandaccommodationcostsrepresent7.4percentand22.0percentoftheCPIbasket,respectively.

3AddingtothepricepressureistheGSTratehike—to8percentfrom7percent—whichtookplaceatthebeginningof2023.Weexpectthehiketocontributeabout0.4percentagepointstoinflation.

4ChinaandHongKongcollectivelyaccountedfor19.4percentofNODXin2022.

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furtherinthefirsthalfof2023,markingninemonthsofconsecutiveyear-on-yeardecline.Theanticipatedturnaroundintheglobalsemiconductorcycleinthesecondhalfof2023shouldmitigatesomeoftheweaknessinNODX.Nonetheless,thislifttoSingapore’sNODXisexpectedtobeoffsetbymoremoderategrowthintheU.S.,E.U.,andmostASEAN+3economies,withNODXconsequentlyexpectedtoremainweakin2023.

Figure5.Non-oilDomesticExports

Source:EnterpriseSingapore;CEIC;AMROstaffcalculations

Figure6.ServicesTradeBalance

Source:DepartmentofStatistics;AMROstaffcalculations

6.Servicesexports,ontheotherhand,continuedtoexpandrobustly,boostedmainlybyhigherreceiptsfromtransportandtravelservices(Figure6).Exportsoftravelservicesincreasedalmostthree-foldfollowingthefullreopeningofborders.AsofMay2023,monthlytouristarrivalshadrecoveredtoaround70percentofpre-pandemiclevel—thelownumberofinboundChinesetouriststhusfarhasbeenoffsetsomewhatbymoretouristsfromASEAN(Figure7).Passengerairtraffichasalsoreboundedstrongly,reachingmorethan80percentofpre-pandemiclevelsasofApril2023.Exportsofmodernservices—financialservices,ICT,intellectualpropertycharges,andotherbusinessservices—grewatamoremoderatepace,inlinewithweakerexternaldemand.Travelservicesarelikelytocontinueexpandingin2023,drivenprimarilybythereturnofChinesetourists,whoaccountedforalmostone-fifthoftotaltouristarrivalsin2019.

Figure7.TouristsArrivalsandPassengerAircraftArrivals

Source:SingaporeTourismBoard;CivilAviationAuthorityofSingapore;DepartmentofStatistics;AMROstaffcalculations

Figure8.FDICommitments

S$bn

Source:EconomicDevelopmentBoard;AMROstaffcalculations

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7.Thefinancialaccountregisteredlargeoutflowsin2022,leadingtoadeficitintheoverallbalanceandadeclineinforeignreserves.Outflowsfromportfolioinvestmentandotherinvestmentamountedto62percentofGDP.Theoutflowsinotherinvestmentprimarilyreflectedthereductionofliabilitiesbydeposit-takingcorporationsinviewoftheincreasinglytighterfinancialmarketconditionsaswellasofficialoutflowsfollowingtheMAS’transferofexcessreservestotheGIC.5Theportfoliooutflowswereduemainlytoanuptickinresidents’investmentinforeignequityandinvestmentfunds.Meanwhile,foreigndirectinvestment(FDI)inflowsremainedstrong,withinwardFDIcontinuingtooutpacedirectinvestmentabroad(Figure8).Despitethechallengingexternalenvironment,FDIcommitmentsin2022wereatanall-timehigh,withinvestmentpledgesfromtheU.S.,Europe,andfromwithinAsia-Pacific.InlargepartbecauseofthelargefundtransferfromMAStoGIC,theoverallbalanceofpaymentswasindeficitin2022,withOfficialForeignReserves(OFR)atUS$289.5billionasofend-2022,comparedwithUS$417.9billionattheendof2021.Sincethebeginningof2023,however,theoverallbalanceofpaymentsturnedpositiveinQ1followingahighercurrentaccountsurplusandmarginalnetinflowsinthefinancialaccount.Theinternationalinvestmentpositionremainedinanetassetposition,at171.8percentofGDPasofend-2022comparedwith224.3percentofGDPattheendof2021.

8.CapitalinflowsintoSingaporeareexpectedtoremainrobustintheneartomediumterm.FDIprospectscontinuetobestrong,particularlyforsemiconductormanufacturing,totheextentthatSingaporeisabletonavigategeoeconomicfragmentationrisksandremainanattractivedestinationformultinationalcompaniesseekingtodiversifytheirsupplychains.Moreover,non-FDIinflowswilllikelybesustainedbythegrowthofassetsandwealthmanagementactivities,fromvariousinvestorsincludingfamilyoffices,toSingapore.

9.TheSingaporeDollarNominalEffectiveExchangeRate(S$NEER)rosebyabout6.8percent(yoy)asofend-2022,whiledomesticinterestrateshavebeenrisingalongwithglobalinterestrates.Amidheightenedinflationarypressureandrisingglobalinterestrates,Singapore’smonetarypolicywasonatighteningtrajectoryin2022—MASadjustedtheslopeoftheS$NEERpolicybandupwardtwice,inJanuaryandApril,andre-centeredthebandupwardthreetimes,inApril,July,andOctober.InApril2023,MASkeptthemonetarypolicysettings—includingthepositiverateofappreciationoftheS$NEERpolicyband—unchangedamidconcernsoverthedomesticgrowthslowdownanddatashowinginflationdeclining(Figure9).Meanwhile,domesticinterestrateshaverisenintandemwithglobalinterestrates,withtheSingaporeOvernightRateAverage(SORA)risingto2.55percentbyend-2022from0.22percentasofend-2021(Figure10).

5Thetransferwasimplementedasaresultoftheaccumulationofforeignreserves,whichreachedabout106percentofGDPasofend-2021,wellabovetheMAS’estimatedneeds(fortheconductofmonetarypolicyandfinancialstability)of65-75percentofGDP.

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Figure9.S$NEER

Source:MAS;CEIC;AMROstaffcalculations

Figure10.SingaporeOvernightRateAverageandU.S.OvernightBankFundingRate

%

Source:FederalReserve,MAS;CEIC;AMROstaffcalculations

10.Residentnon-banklendingcontractedinthepastfewquartersonthebackofweakeningbusinesssentimentandtighterfinancialmarketconditions.Afterexpandingatarobustpaceof9.3percent(yoy)in2021,residentnon-banklendingcontractedby0.3percentin2022andshrankfurtherinearly2023.Thecontractionwasmainlydrivenbyafallinlendingtobusinesses,particularlygeneralcommerce—reflectingdeterioratingbusinesssentimentandearlyloanrepayments,andgreaterrelianceoncashthanonloansamidrisinginterestrates—whilelendingtonon-bankfinancialinstitutionsexpanded(Figure11).Lendingtohouseholdsalsoslowed,butwassupportedbysteadyexpansioninhousingandbridgingloansandcredit-cardloans(Figure12).

Figure11.LoanstoBusinessesFigure12.LoanstoHouseholds

%yoy

10

5

0

-5

AllOthers

Transport,Storage&Communication(TS&C)

-10

GeneralCommerce

Non-BankFinancialInstitutions

BuildingandConstruction

Manufacturing

-15

BusinessLoans

Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23Apr-23

%yoy

6

5

4

3

2

1

0

-1

HousingAndBridgingLoansCarLoans

CreditCards

ShareFinancing

Others

-2

-3

ConsumerLoans

Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23Apr-23

-4

Source:MAS;CEIC;AMROstaffcalculationsSource:MAS;CEIC;AMROstaffcalculations

11.Thebankingsectorremainssoundthankstoeffectivemacroprudentialmeasures,strongcapitalbuffers,adequateliquidity,androbustassetquality.Thebankingsystem’soverallnon-performingloan(NPL)ratiofellto1.8percentinQ12023from2.1percentinQ42021,althoughtheNPLratiosinconstructionandtransportandstoragesegmentswerehigherat6.4percentand6.8percentrespectively,reflectingthegreaterimpactofthepandemiconcertainsectors(Figure13).Capitalandliquiditybuffersremainstrongandwellaboveregulatoryrequirements(Figure14).Meanwhile,theaverageLTVratioofhousingloansdeclinedto41.6percentinQ12023from45.3percentinQ42021,partlyreflectingmacroprudentialmeasuresputinplaceoverthepastdecade.

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Figure13.NPLRatios

10

5

0

%12/202103/202206/202209/202212/202203/2023

Overall

Manufacturing

Buildingand

Construction

GeneralCommerce

Transportand

Storage

Financialand

Insurance

Informationand

Communication

HousingandBridging

Loans

Source:MAS;CEIC;AMROstaffcalculations

Figure14.CapitalAdequacyRatios

Source:MAS;CEIC;AMROstaffcalculations

12.Recentcoolingmeasuresandrisinginterestratesappeartohavemoderatedtransactionsinthepropertymarket.TheAdditionalBuyer’sStampDuty(ABSD)wasraisedforforeignersinDecember2021,aswellasSingaporeansandPermanentResidentspurchasingasecond,ormoreresidentialproperty,whiletheTotalDebtServicingRatio(TDSR)onloansextendedbyFinancialInstitutions(FIs)andLoan-to-Value(LTV)ceilingforpublichousingloanswerelowered.InSeptember2022,theauthoritiesfurthertightenedtheTDSRonloansextendedbyFIsandtheLTVceilingforpublichousingloans,andintroduceda15-monthwait-outperiodforprivateownerswishingtobuypublicflats.However,theoverallimpactofthemeasuresremainstobeseen,particularlyamidtighthousingsupply.Whilepreviousroundsofcoolingmeasureshavehadamoderatingeffect,privateresidentialpricesshowedrenewedsignsofincreaseinQ12023,reflectingrobustdemandstemmingfromstronghouseholdbalancesheetsandsustainedincomegrowth,aswellasinvestorsfromothercountries,amidtightsupplyconditions.6Morerecently,inApril2023,theABSDratesforsomebuyergroupswereraisedpre-emptivelytomanageinvestmentdemandbyresidentsandnon-residentsamidthegradualeasingofsupplytightness.

13.Goingforward,increasedhousingsupplywilllikelyalleviatetightnessinthepropertymarket.Upwardpricepressureinthesalesandrentalmarketsisexpectedtoease,thankstoaspikeinnewhomescompleted.Residentialrentincreasesshouldalsoeaseinthecomingquarte