Singapore's Central Bank sees below potential GDP growth
2012-10-30 10:53:58
Singapore's economic growth is expected to come in below 'potential' for the second consecutive year in 2013 due to weak global momentum, the Monetary Authority of Singapore said Tuesday.
Although the economy escaped a technical recession, it contracted in the third quarter after a strong expansion at the beginning of the year, MAS said in its Macroeconomic Review. GDP growth is expected to come in at 1.5-2.5 percent this year.
According to MAS, global growth momentum is unlikely to pick up considerably as the deleveraging process in the advanced economies will be protracted. Nonetheless, the bank said Singapore's domestic output should continue to be above its underlying potential, aided by the resilience of the domestic-oriented sectors.
Moreover, this will strengthen labor market, which should remain at close to full employment in 2013. Amid tight labor market, resident wage growth could rise to above 3 percent in 2013 from 2-3 percent in 2012, the bank said.
At the same time, the bank says consumer price index-all items inflation could rise to 4.5 percent temporarily in the fourth quarter 2012 and in the first quarter 2013.
Going forward, inflation would moderate gradually to around 3.5 percent in the fourth quarter of next year, partly because of favorable base effects, it said.