The near-term impact on resident employment should be mitigated by targeted policy support such as enhanced wage support and rental waivers and rebates. Core inflation should continue on its gradual recovery path, with the 2021 forecast unchanged at 0 to 1%. 3/9  BIS central bankers' speeches  While some increase in import prices is expected, this should be confined to certain noncooked food items. But domestic cost pressures will be muted given the lingering slack in the labour market. The CPI-All Items inflation forecast is revised to 1.0 to 2.0% from 0.5 to 1.5%. The revision takes into account higher-than-expected car prices in Q2, due to the sharp rise in COE premiums. CPI-All Items inflation, which rose by 2.2% in April and May, is expected to ease in the second half of this year as base effects fade. The property market has been remarkably resilient in the face of the pandemic and recession last year and continued uncertainty over COVID-19 risks this year. While nominal GDP contracted 8.2% in 2020, the residential property price index rose by 1.6% during the year. As at Q1 2021, the PPI was 5.6% above its pre-pandemic levels, while nominal GDP was about 4% below. MAS, together with MND and URA, remain highly vigilant to the risk of a sustained increase in prices relative to income trends. A prolonged divergence between prices and incomes is unsustainable from a market stability perspective and undesirable from a housing affordability perspective.
This was largely offset by a negative currency translation effect of $ billion, mainly due to the strengthening of the Singapore Dollar against the US Dollar and Japanese Yen. For the financial year, MAS made a net profit of $ billion. This was after: deducting $ billion of expenses for domestic money market and other operations; and contributing $ billion to the Government’s Consolidated Fund, as payment in lieu of corporate income tax. MAS will return half of the profits, or $ billion to the Government and the remainder will be added to MAS’ reserves. MAS 50th ANNIVERSARY This year marks MAS’ 50th anniversary. We will be commemorating this milestone with a series of activities later this year, to reflect on the journey we have taken and to thank all our partners who have walked with us and 8/9  BIS central bankers' speeches  helped us on this journey. We will provide more details of the activities at a later date. Like the rest of Singapore, MAS has come a long way.