MAS: Could Shift to Looser Policy After AI Boosts Productivity

According to The Straits Times, Edward Robinson, Chief Economist at the Monetary Authority of Singapore, stated on October 20 at the Beijing Financial Street Forum that while central banks may consider easing monetary policy once artificial intelligence generates widespread productivity gains, the current AI investment boom is fueling demand, requiring policies to remain appropriately restrictive. He noted that AI-related investments are driving economic growth, but the technology has yet to deliver significant productivity improvements across the broader economy, and urged a gradual, data-dependent approach. The Monetary Authority of Singapore tightened monetary policy in April and July 2026 due to rising inflation risks, and maintained its stance unchanged in October; its October 14 statement warned that if the AI boom generates wider economic spillovers and pushes up unit labor costs, domestic inflation could remain elevated. Robinson said that AI-driven electronics accounted for more than 70% of Asia's export growth this year, but growth in industries producing AI-related technologies was driven primarily by increased investment and more intensive use of existing resources rather than efficiency gains. Citing OECD estimates, he added that with sufficiently broad adoption and appropriate investment, AI could boost annual total factor productivity growth by as much as 0.6 percentage points.