Berita 24 English - Officials stated on Wednesday that while Singapore's economy grew faster than expected in the first quarter, annual ...
Because international trade outweighs its local economy, Southeast Asia's financial sector is frequently regarded as a barometer for world growth.
The Ministry of Trade and Industry (MTI) said that GDP increased 3.7 percent year on year in the first quarter, beating the government's expectation of 3.4 percent but matching analysts' predictions in a Reuters poll.
"Unfortunately, the foreign economic situation has deteriorated... China's strict measures to prevent domestic COVID-19 outbreaks are expected to weigh on its economy and add to global supply bottlenecks," said Gabriel Lim, permanent secretary for trade and industry.
"As a result, global supply disruptions are predicted to be more severe and long-lasting than previously anticipated, possibly lasting well beyond 2022. This in turn is likely to restrain production and lower GDP growth in some overseas economies by more than we had previously expected," he added.
The economy grew by 0.7 percent quarter-over-quarter, seasonally adjusted.
The MTI kept its GDP growth prediction for 2022 at 3% to 5%, but noted that growth is more likely to be in the lower half of this range due to uncertainty surrounding the Russia-Ukraine war and China's strict COVID-19 measures.
"In the first quarter, Singapore made significant progress in reopening the economy, with all sectors outperforming or normalizing. If China enters a recession, the future will be more difficult, as the economy of Singapore will be put at risk "According to Jeff Ng, a MUFG analyst.
Most COVID-19 limitations have been lifted, and traveler entry criteria have been simplified.
INFLATION
Singapore likewise kept its inflation forecast, predicting that core inflation, the central bank's preferred pricing metric, will peak around 4% in the third quarter of 2022 before easing in late 2022.
Official data released on Monday revealed that Singapore's core inflation climbed at its quickest rate in a decade in April, owing to increasing food and utility prices.
At a media briefing on Wednesday, Edward Robinson, deputy managing director of the Monetary Authority of Singapore, stated, "The current monetary policy stance remains adequate."
"The (previous) three monetary policy tightening steps will decelerate the inflation momentum," he noted.
Last week, Singapore Prime Minister Lee Hsien Loong acknowledged that global anti-inflation efforts could lead to recession, but that they are vital to keep inflation from increasing.
