MAS: Could Shift to Looser Policy After AI Boosts Productivity

On Oct 21 that, according to The Straits Times, Edward Robinson, Chief Economist of the Monetary Authority of Singapore, stated at the Beijing Financial Street Forum on Oct 20 that once artificial intelligence brings widespread productivity gains, central banks could ease monetary policy; however, since the current AI investment boom is boosting demand, policy should remain appropriately restrictive. He noted that while AI-related investment is driving economic growth, the technology has yet to deliver significant productivity improvements to the broader economy, and he called for a gradual, data-driven approach.

The MAS tightened monetary policy in April and July 2026 due to rising inflation risks and kept policy unchanged in October; in a statement on Oct 14, it warned that domestic inflation could remain elevated if the AI boom generates wider economic spillovers and drives up unit labor costs.

Robinson said that AI-driven electronics accounted for over 70 percent of Asia's export growth this year, but growth in industries producing AI-related technologies primarily stemmed from 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 up to 0.6 percentage points.