MAS: Monetary Policy May Shift to Easing After AI Productivity Gains

On October 21, The Straits Times reported that Edward Robinson, Chief Economist of the Monetary Authority of Singapore (MAS), stated at the Beijing Financial Street Forum on October 20 that once AI brings productivity improvements across the economy, central banks may shift to easing monetary policy. However, given the current demand surge driven by the AI investment boom, policies should maintain moderate restrictions. He noted that while AI-related investments are driving growth, they have not yet led to significant productivity improvements in the overall economy, and misjudging this transition could pose inflation risks. MAS tightened monetary policy in April and July 2026, and kept it unchanged in October; its policy statement on October 14 warned that if the AI boom has broader spillover effects and raises unit labor costs, domestic inflation could remain elevated. Robinson mentioned that the spread of AI is faster than that of personal computers and the internet. While specific applications have shown efficiency improvements, it is still insufficient to confirm a decisive leap in overall economic productivity. He likened it to the electrical revolution a century ago, stating that once AI is widely adopted and investments in skills and infrastructure are in place, it could increase the annual growth rate of total factor productivity by up to 0.6 percentage points (according to OECD estimates), which could effectively counter structural headwinds such as the aging population in Asia.