Sign up | Log in



Home  >>   Daily News  >>   Singapore News  >> Economy  >> Singapore cuts 2013 CPI outlook
NEWS UPDATES Asean Affairs   25 July 2013  

Singapore cuts 2013 CPI outlook

SINGAPORE'S central bank lowered its inflation outlook for the year on Tuesday but said it was concerned about household debt levels as interest rates looked set to rise.
The Monetary Authority of Singapore (MAS) revised downwards its inflation forecast for 2013 to 2-3 per cent from an earlier 3-4 per cent, citing the sharp fall in car prices earlier this year as well as a slower rise in accommodation costs.
Economic growth this year will "comfortably" meet the official forecast of 1-3 per cent, the central bank added, citing the strengthening US economy and Japan's expansionary policies that will likely offset headwinds from a slowdown in China and easing public spending in some Southeast Asian countries.
"For the first time in three years, CPI inflation has come down closer to historical trends and within MAS's comfort range," MAS managing director Ravi Menon said during a press briefing for the release of the central bank's annual report.
But MAS warned that core inflation which excludes cars and accommodation since these were more influenced by government policies could rise "moderately" to 2 per cent or slightly higher in the latter half of 2013 due to continuing tightness in the labour market.
Headline inflation averaged 2.8 per cent for the first half of 2013, data showed.
MAS was committed to ensuring that the recent improvements in inflation were sustained and the "current policy stance of modest appreciation of the Sing dollar is appropriate in containing re-emergence of strong cost and price pressures in a restructuring economy," Menon said.
Singapore's economy grew by just 1.3 per cent in 2012 while headline inflation was 4.6 per cent.
The central bank, however, expressed concerns about rising household debt in the city-state and said an estimated 5-10 per cent of borrowers had "probably over-leveraged on their property purchases" based on their total debt service payment ratio of more than 60 per cent of monthly income.
"If mortgage rates were to rise by 3 percentage points, the proportion of borrowers at risk could reach 10-15 per cent," Menon said.
Menon said household balance sheets in Singapore were resilient at an aggregate level, with cash and deposits exceeding debt, but the healthy balance sheets were not uniform across households.
Banks in Singapore now offer housing loans at around 1.1 to 1.2 per cent per annum, well below the 3.5 per cent level that financial institutions must use when calculating debt servicing ratios of potential borrowers based on the latest central bank requirements.
MAS yesterday also posted a net loss of S$10.61 billion for its last fiscal year ended March 2013 as the local dollar's gains against the yen and euro diminished the value of its foreign currency holdings.
The loss, its second in three years, was just slightly below the record S$10.9 billion deficit incurred in financial year 2010/11 when the Singapore dollar also soared.
MAS made a net profit of S$2.77 billion in FY2011/12.
"We made good investment returns, but when measured in Singapore dollars these gains were more than offset by the strength of the currency," Menon said.
The Singapore dollar gained 13.8 per cent against the yen and 6.2 per cent against the euro in the 12 months to March, the MAS said. During the same period, the Singapore dollar rose 5.1 per cent versus the British pound and 1.3 per cent against the dollar.
The central bank had total assets of S$340.4 billion as at end-March 2013, up from S$319.2 billion at the end of the previous financial year.
Assets held by MAS are mainly for managing the Singapore dollar's value against a basket of currencies and to defend the local unit when required.
The task of ensuring the country earns adequate returns on its massive foreign exchange reserves lies with GIC, formerly known as the Government of Singapore Investment Corp, which has an estimated $300 billion.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories    25 July 2013 Subsribe Now !
• Seventh Press Release of the ASEAN Commission on the Promotion and Protection of the Rights of Women and Children (ACWC) Subcribe: Asean Affairs Global Magazine
• Thai bourse launches projects promoting financial literacy and discipline  Asean Affairs Premium
• Myanmar soft drink company says Coca Cola is no threat 
Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• Trade with India to hit $5 billion this year
• Binh Dinh puts oil refinery project out to tender
• MAS Takes Civil Penalty Action and Issues Prohibition Order Against
• Singapore cuts 2013 CPI outlook
Asean Analysis            25 July 2013 Advertise Your Brand
• Asean Analysis- July 25, 2013
• Asean Weekly:The Biweekly Update 12 July 2013
Asean Stock Watch     24 July 2013
• Asean Stock Watch-July 24, 2013  

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand