Illustrative photo (Photo: Bloomberg)Singapore (VNA) – The Monetary Authority of Singapore (MAS) onOctober 12 decided to tighten its monetary policy for the second time thisyear, forecasting the economy to expand steadily and core inflation to rise.
The MAS would slightly increase the slope of the Singapore dollar nominaleffective exchange rate policy band, in a “measured adjustment” to its monetarypolicy. This was followed the slight increase in the slop of the policy band inApril from zero percent previously.
Following the announcement, the Singapore dollar gained less than 0.1 percentto 1.3758 against the US dollar.
The Singaporean economy is foreseen to expand at a slower pace for the rest ofthis year and the whole 2019 while the inflation rate will experience modestbut continuing pressures before leveling off at just below 2 percent over themedium term.
The tightening comes despite advance official estimates from the Ministry ofTrade and Industry showing that the country’s economic grew 2.6 percent in thethird quarter of 2018, as compared to the strong growth of 4.1 percent in theprevious three months.
On a quarter-on-quarter basis and seasonally adjusted, the economy expanded by4.7 percent during July-September, faster than the 1.2 percent growth in theprevious quarter.
Manufacturing grewby 4.5 percent year on year, the numbers falling short of the more than 10.6percent growth seen in the second quarter. The growth was mainly due to thedecline in global demand for electronic products. Meanwhile, the constructionsector contracted by 3.1 percent, spurred by weakness in the public sectorconstruction projects.
In stark contrast, the service industry grew by 2.9 percent, backed by the financeand insurance, business services, and wholesale and retail trade sectors.
The MAS forecasts the gross domestic product (GDP) growth in 2018 will come inwithin the upper half of the 2.5-3.5 percent forecast range in 2018 andmoderate slightly in 2019.
MAS Core Inflation will come in within the forecast range of 1.5-2 percent for2018 as a whole, and average 1.5-2.5 percent in 2019. The inflation of consumerprice index for all items (CPI-All Item) is predicted to be about 0.5 percentin 2018 before picking up to 1-2 percent in 2019.-VNA
VNA
