ASEAN KEY DESTINATIONS
Singapore's economic growth unlikely to weaken further: MAS
SINGAPORE: The Republic's economy contracted in the second quarter of this year but the growth momentum is not expected to deteriorate further in the second half, the Monetary Authority of Singapore (MAS) said on Tuesday (Jul 21).
Speaking to reporters at a press conference on MAS's annual report for financial year 2014/15, MAS managing director Ravi Menon also said the Ministry of Trade and Industry (MTI) and MAS and are reviewing their growth forecast for 2015, taking into account the weaker outturn in the first half of the year as well as support factors in the second half.
Singapore's economy contracted by 4.6 per cent in the second quarter at a seasonally adjusted and annualised rate, according to advance estimates released earlier this month. For the first half of 2015, GDP growth came in at 2.3 per cent year-on-year, which is in the lower half of the government's 2 to 4 per cent forecast for the whole year.
But looking ahead, Mr Menon said the global and regional economic recovery remains broadly intact, with the US economy regaining momentum after a weak first quarter.
In China, the picture is mixed but latest indicators suggest the economy is stabilising.
Turning to inflation, Mr Menon said Singapore has experienced negative headline inflation for seven months now. However, he said that the city-state is not facing deflation, as underlying cost pressures persist.
MAS said headline, or CPI All-items, inflation will likely remain negative for the rest of 2015. As such, inflation for the year is expected to come in at the lower half of the forecast range of -0.5 per cent to +0.5 per cent.
Inflation, however, is likely to pick up in 2016 as the effect of lower car prices and housing rentals could start to wear off on a year-on-year basis.
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