MAS tightening monetary policy paves way for GST hike: economists

THE tightening of monetary policy is unlikely to delay the government's planned goods and services tax (GST) hike from 7 to 9 per cent, and may in fact pave the way for the raise by controlling inflationary pressures, said economists.

In a surprise move on Tuesday (Jan 25), the Monetary Authority of Singapore (MAS) raised the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) slightly, while keeping its width and level unchanged.

As the move aims to tackle higher-than-expected inflation, one question might be whether the GST hike - which would mean higher prices - should be delayed to avoid contributing to inflationary pressures.