Ravi Menon: Remarks on the MAS Annual Report 2022/2023 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the MAS Annual Report 2022/2023 Media Conference, Singapore, 5 July 2023. *** Good morning and thank you for joining us today for the release of the MAS Annual Report and the MAS Sustainability Report for FY 2022/23. I will focus my remarks this morning on four issues: What is the balance of risk between inflation and growth? Why did MAS record a financial loss and is it cause for concern? How is MAS harnessing the benefits and addressing the risks of wealth inflows? How is MAS safeguarding the Official Foreign Reserves against climate risk? WHAT IS THE BALANCE OF RISK BETWEEN INFLATION AND GROWTH? Let me begin with the balance of risk between inflation and growth. A material slowdown in global economic activity in the later part of this year looks increasingly likely. Global growth held up strongly in Q1 2023, on the back of strong consumer demand for services, supportive labour market conditions, and China's reopening. But the restraining effects of monetary policy tightening is expected to bear down more heavily on consumer demand in the US and Eurozone. In China, the boost from reopening is expected to ease over the next few quarters as household spending normalises and sluggish external demand weighs on exports. Inflation appears to have peaked globally though there is uncertainty over how quickly inflation will return to targets.
Third, we will also encourage SFOs to invest in Singapore companies and the local equity market. We will make two enhancements. One, the scope of the tax incentive will be expanded to recognise all investments in non-listed Singapore operating companies (including private credit), and not just private equity investments as is the case today. Two, we will recognise twice the amount invested in Singapore-listed equities, and in eligible Exchange Traded Funds (ETFs) and unlisted funds which invest primarily in Singapore-listed equities, for purposes of meeting the SFO's investment requirement. Fourth, we will encourage SFOs to contribute more to job creation and value creation for the Singapore ecosystem. We will make two enhancements: One, we will now require that at least one of the investment professionals that SFO applicants currently need to hire is a non-family member. This will expand the pool of available jobs for professionals in Singapore. Two, all new SFO applicants will have to now meet the business spending requirement solely from spending locally unlike previously when this could be met with overseas spending. This will help channel greater benefits to Singaporebased businesses and service providers. Fifth, we will encourage SFOs to conduct philanthropic activities through Singapore, both locally and overseas. We will make two enhancements. One, to encourage giving locally, we will recognise donations to local charities alongside normal business spending. Two, to encourage giving overseas using Singapore family offices as a base, we will launch today the Philanthropy Tax Incentive Scheme (PTIS) for family offices.