Singapore economy on track for 'moderate' growth despite headwinds: MAS
THE Singapore economy is "on track for moderate growth" despite some external and domestic headwinds, said the Monetary Authority of Singapore (MAS) on Tuesday in its twice-yearly Macroeconomic Review.
Reiterating its 2014 gross domestic product (GDP) growth forecast of 2.5-3.5 per cent this year, and a "broadly similar" pace for 2015, the central bank said: "Sectors that cater to final demand in the US will fare relatively favourably, while those that are tied to the eurozone and China could be weighed down by the sluggish performance in these economies.
"Meanwhile, domestic-oriented sectors will remain resilient on the back of firm underlying demand, although those segments that are more reliant on labour input, or face greater competition, could experience profit margin pressure."
The MAS added that strong labour demand will continue to butt up against labour supply constraints, keeping wage growth firm.
Therefore, domestic cost pressures - mainly stemming from the tight labour market - will remain the "primary source" of inflation.
Two weeks ago, the central bank kept its monetary policy unchanged, just as the market had expected - keeping the Singapore dollar on an appreciating path to guard against inflation.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Economy & Policy
Gan Kim Yong visits US and Canada; to mark 20th anniversary of US-Singapore FTA
NTUC aims to do more to support PMEs, who now account for nearly half its membership
Daily Debrief: What Happened Today (Apr 25)
Singapore’s inflation eases more than expected in March, with headline inflation at 2.5-year low
8 in 10 firms in S-E Asia, Greater China positive about business environment: UOB survey
Flexi-work request guidelines not meant to prescribe blanket outcomes for employers or influence hiring of workforce: SNEF