By Xinghui Kok
SINGAPORE (Reuters) – Singapore’s central financial institution mentioned on Monday it expects 2024 gross home product development on the higher finish of the two%-3% forecast vary, and for subsequent 12 months to have an identical development tempo.
In its macroeconomic evaluate launched on Monday, the Financial Authority of Singapore (MAS) mentioned financial development “strengthened decisively” within the third quarter and pegged the efficiency to restoration within the manufacturing sector, elevated buying and selling within the monetary sector and the return of Chinese language vacationers after a visa exemption began in February.
Preliminary information confirmed Q3 GDP was up 4.1% year-on-year after posting 2.7% development in Q2.
The central financial institution cautioned that 2025 has a danger of decrease development for Singapore, a trade-dependent regional monetary hub, due to heightened world uncertainties.
“The outcome of the upcoming U.S. presidential election, an escalation in geopolitical tensions including in the Middle East, or a sharper slowdown in China could adversely affect global trade and growth, and in turn weigh on Singapore’s economic prospects,” mentioned the MAS.
“Additionally, the durability of the AI-led global tech cycle recovery remains uncertain and could be sensitive to aggregate demand conditions.”
The MAS maintained that core inflation ought to ease to round 2% by the tip of this 12 months regardless of inflation rising to 2.8% on an annual foundation in September after hitting a 2-1/2 12 months low of two.5% in July.
It expects core and headline inflation to common 1.5%–2.5% in 2025.
“Given the progressive decline in inflation, the risks to Singapore’s inflation outlook are now assessed to be more balanced compared to previous monetary policy reviews,” mentioned the MAS, which held its financial coverage settings once more this month in its final evaluate of the 12 months.
