SINGAPORE- Singapore’s economic growth is expected to moderate further next year, in line with a slowdown in the city-state’s major trading partners, the head of Singapore’s central bank said on Tuesday.
“The extent of the growth moderation will depend in part on how the scenarios for the global economy will pan out,” said Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS).
“As of now, we expect neither a recession nor a stagflation in Singapore next year,” he added.
Menon was speaking after the MAS announced its annual report.
Last week, the MAS tightened its monetary policy, in an off-cycle move, saying the action would slow inflation as the city-state joined other countries in ramping up their battle against mounting price pressures.
Singapore’s tightening was its fourth in the past nine months, with central banks from New Zealand to Canada recently hiking interest rates to restrain soaring consumer prices.
The central bank reiterated that Singapore’s gross domestic product growth rate is expected to come in at the lower half of the 3-5 percent forecast range for 2022.
Singapore’s economy expanded more than initially estimated in the first quarter of this year but annual GDP will likely be in the lower half of the government’s forecast range, officials said on Wednesday, citing war in Ukraine and supply chain disruptions.
The Southeast Asian financial hub is often seen as a bellwether for global growth as international trade dwarfs its domestic economy.
Gross domestic product (GDP) grew 3.7 percent year-on-year in the first quarter, the Ministry of Trade and Industry (MTI) said, higher than the government’s advance estimate of 3.4 percent but matching analysts’ forecasts in a Reuters poll.
On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 0.7 percent.
The MTI maintained its 2022 GDP growth forecast at 3 percent to 5 percent, but said growth is more likely to come in at the lower half of this range, due to uncertainties stemming from the Russia-Ukraine conflict and stringent COVID-19 measures in China.
Singapore also maintained its inflation guidance which suggested that core inflation – the central bank’s favoured price measure could peak around 4 percent in the third quarter, before moderating in late 2022.
Singapore’s core inflation rose in April at its fastest pace in a decade, driven by higher inflation for food and utilities, official data showed.
