Singapore’s economy is likely to grow at the higher end of the official 4-6% forecast this year, while inflation will ease after peaking in the first quarter, the country’s central bank said on Wednesday.
The Monetary Authority of Singapore, in its latest macro economic review, said the Japan earthquake could dampen Singapore’s economic activity in the immediate months ahead, but activity is likely to rebound once some normalcy has been restored in Japan.
The Monetary Authority of Singapore, in its latest macro economic review, said the Japan earthquake could dampen Singapore’s economic activity in the immediate months ahead, but activity is likely to rebound once some normalcy has been restored in Japan.
“As such, while the recent disaster in Japan could cast a pall on the near-term outlook of the Singapore economy, the firm and broad-based growth in first quarter 2011 has set the stage for steady growth for the rest of the year,” it said.
The central bank also said companies and banks faced higher wage bills due to the tight labour market in services, notably in the financial sector.
Inflation, however, peaked at 5.2% year-on-year in the first quarter and could ease to 3% in the fourth-quarter of this year, it said, citing the base effect of high car prices in the later part of 2010.
MAS releases its macroeconomic review a few weeks after its monetary policy statement to give economists and traders a better understanding of the thinking behind monetary policy.
Singapore tightened monetary policy further on April 14 by sanctioning an immediate rise in the value of its currency and keeping its stance of allowing a gradual and moderate rise in the Singapore dollar against a basket of currencies.
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