Singapore's central bank says GDP to grow at more sustainable rate in 2008.
Singapore's economic growth will moderate in 2008 amid a global slowdown and as the city-state tries to control rising inflation, the country's central bank said Tuesday. Still, even with a tighter monetary policy, the economy will expand at a healthy level, the bank said.
The Monetary Authority of Singapore said the city-state could still achieve full-year gross domestic growth of 4-6 percent, barring a sharp downturn in the U.S. economy. Singapore's economy grew by 7.7 percent last year.
"A more severe global downturn cannot be ruled out if there is a further escalation of the financial crisis in the U.S.," the bank said. "If this occurs, Singapore's growth will be adversely affected."
Singapore is working to control inflation that is at its highest level in 26 years. Earlier in April the monetary authority unexpectedly let the Singapore dollar rise at a faster pace to keep a lid on import costs -- although prices have continued to increase.
The central bank sets its monetary policy by adjusting exchange rates in an undisclosed currency band. It last shifted the currency trading band higher at its meeting on April 10. "The re-centering of the policy band ... will help to alleviate inflation pressures and provide support to the economy as it eases to a more sustainable growth rate," the bank said.
Singapore's consumer prices rose 2.1 percent in 2007. In March, the consumer price index was 6.7 percent higher than it was a year earlier. A recent jump in food costs has been a key driver of inflation across Asia, and a further acceleration in commodity prices could not be ruled out, the authority said.
"Even if (food and oil) prices were to level off, upward pressure on wages and rentals, reflecting domestic capacity constraints, are likely to remain," it said. The central bank forecasts inflation will peak at around 7 percent in the middle of the year and average in the upper half of a 4.5-5.5 percent range for the whole year.
Singapore's economic growth will moderate in 2008 amid a global slowdown and as the city-state tries to control rising inflation, the country's central bank said Tuesday. Still, even with a tighter monetary policy, the economy will expand at a healthy level, the bank said.
The Monetary Authority of Singapore said the city-state could still achieve full-year gross domestic growth of 4-6 percent, barring a sharp downturn in the U.S. economy. Singapore's economy grew by 7.7 percent last year.
"A more severe global downturn cannot be ruled out if there is a further escalation of the financial crisis in the U.S.," the bank said. "If this occurs, Singapore's growth will be adversely affected."
Singapore is working to control inflation that is at its highest level in 26 years. Earlier in April the monetary authority unexpectedly let the Singapore dollar rise at a faster pace to keep a lid on import costs -- although prices have continued to increase.
The central bank sets its monetary policy by adjusting exchange rates in an undisclosed currency band. It last shifted the currency trading band higher at its meeting on April 10. "The re-centering of the policy band ... will help to alleviate inflation pressures and provide support to the economy as it eases to a more sustainable growth rate," the bank said.
Singapore's consumer prices rose 2.1 percent in 2007. In March, the consumer price index was 6.7 percent higher than it was a year earlier. A recent jump in food costs has been a key driver of inflation across Asia, and a further acceleration in commodity prices could not be ruled out, the authority said.
"Even if (food and oil) prices were to level off, upward pressure on wages and rentals, reflecting domestic capacity constraints, are likely to remain," it said. The central bank forecasts inflation will peak at around 7 percent in the middle of the year and average in the upper half of a 4.5-5.5 percent range for the whole year.
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