Sep 01, 2022 02:00AM ET
By: AnalysisWatch
The outlook for Singapore's economy has deteriorated due to the adverse impact of rising commodity prices and a slowdown in China, according to a Monetary Authority survey on Thursday.
In a survey conducted over the past three weeks, the Monetary Authority of Singapore found that respondents expect the economy to grow by 3.5% in 2022, lower than previous expectations of 3.8%.
This figure is still in line with MAS's expectation that GDP will reach 3–4% in 2022, with weaker growth expected in 2023. Survey respondents also expect growth to slow to 2.8% in 2023.
The survey found that slowing growth in the finance and construction sectors will weigh most heavily on GDP. The city-state's key manufacturing sector is expected to grow more than previously expected.
Respondents also expect inflation to grow more than previously anticipated. Singapore's consumer price index is expected to end the year at 5.7%, up from 5% in the previous survey. Core inflation is also expected to stand at 3.8%, compared to previous expectations of 3.4%. According to the survey, MAS is also expected to continue tightening monetary policy for the rest of the year.
Singapore's inflation is currently at a 14-year high due to pressure from rising fuel and food costs. This is due to the sharp rise in oil prices earlier in the year, which increased the country's high fuel bill.
MAS expects annual consumer price growth to be between 5% and 6% in 2022, while core inflation is expected to be between 3% and 4%.
The economic slowdown in China, which is Singapore's largest trading partner, has weighed heavily on the island nation's economy. China is struggling with slowing growth due to its strict zero value-added tax policy as well as a growing energy crisis due to drought in some provinces.
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