Last year, Singapore’s GDP growth was driven by two engines – the trade-related cluster and modern services cluster – with domestic industries flat. The trade-related cluster – manufacturing, wholesale trade, transport and storage – grew 4.3% and contributed 55% to overall GDP growth. The modern services cluster – financial, information and communications, and professional services – also grew 4.3% and contributed 40% to overall GDP growth. Growth in the domestic industries cluster – construction, retail and F&B, health and education services – was negligible, mostly weighed down by the slump in construction. This year, the trade-related cluster is decelerating, modern services is holding up, and the domestic industries cluster is gradually recovering. 4 / 11  BIS central bankers' speeches  The trade-related cluster will continue to face the full brunt of the maturing of the global tech cycle and growing trade tensions. The modern services cluster will be the main driver of growth this year, supported by healthy regional demand and increased investments in digitalisation as the domestic economy undergoes transformation. Domestic industries will make a modest, positive contribution to overall growth, as the construction sector turns around, and retail and F&B benefits from firm labour demand conditions and efforts to lift productivity. INFLATION AND MONETARY POLICY Inflation in Singapore remains subdued and within expectations. MAS Core Inflation this year is expected to come in near the mid-point of the forecast range of 1–2%. While there will be some domestic cost pressures from firm labour market conditions, underlying inflationary pressures should remain contained.

The key to addressing the tension between development and decarbonization lies in credible and inclusive transition pathways, based on strong public-private partnerships. Transition plans should enable progressive decarbonisation that is aligned to net zero goals while taking account of developmental needs and providing support for communities to pivot to new growth opportunities in a green economy. The GFANZ Asia-Pacific Network has the potential to spearhead this effort in Asia, mobilising banks, insurers, asset managers, and service providers in this part of the world, and facilitating alignment in a credible and inclusive transition towards net zero. I am pleased to be part of this effort as Chair of the Advisory Board of the GFANZ AsiaPacific Network, from two perspectives. First, as Chair of the Network of Central Banks and Financial Supervisors for Greening the Financial System (“NGFS”), I look forward to opportunities for collaboration between the NGFS and GFANZ, exploring further how financial regulators and financial institutions can work together to address climate related risks and advance the net zero agenda. Second, from the perspective of the MAS, which is actively working with the financial industry to develop green finance solutions, markets, and infrastructure, I look forward to opportunities for partnership between MAS and the GFANZ Asia-Pacific Network to promote a vibrant green finance ecosystem here in Asia. The task ahead is daunting. Asia is diverse – across stages of economic development, and across a variety of climate related risks and transition challenges. But the task is hugely purposeful, and if we succeed, transformative.