Singapore’s economy is declining as is inflation
2022.11.23 00:56
Singapore’s economy is declining as is inflation
Budrigannews.com – In October, Singaporean inflation eased more than anticipated due to fewer problems in the supply chain and lower commodity prices. However, the nation still anticipates that economic growth will slow in 2023 due to growing global headwinds.
Data from Wednesday showed that Singapore’s – the Monetary Authority of Singapore’s (MAS) preferred inflation gauge – increased by 5.1% in October, which was lower than expectations of 5.3% and the reading from September.
Private transportation and lodging costs were included in the 6.7% increase in October, well below estimates of 7.1% and the previous month’s reading of 7.5%.
The MAS’s monetary tightening efforts this year are now paying off, as evidenced by the easing of price pressures.The island state’s price pressures were also reduced as problems in the supply chain were resolved and commodity markets became more stable.
The MAS predicts that high labor costs and persistent supply shortages will keep inflation high in the near future, despite the fact that inflation remains relatively high.Despite having raised its forecast in September, the MAS maintained its 2022 outlook for core and overall inflation of 3.5 percent to 4.5 percent and 5.5 percent to 6.5 percent, respectively.
However, it appears that the economic outlook for Singapore has deteriorated further.In a separate announcement, the Ministry of Trade and Industry (MTI) stated that the island state’s GDP is anticipated to rise by 0.5 percent to 2.5 percent in 2023, significantly less than the 3.5% growth forecast for 2022.
In addition, the MTI reported GDP growth of 4.1% in the third quarter, which was lower than the government’s advance estimate. Additionally, the 3.5% forecast for 2022 was slightly reduced from an earlier range of 3% to 4%.
This year’s increased inflationary pressures and weakening global demand for the island state’s major electronics and industrial exports both contribute to the pessimistic forecast.
This year, Singapore’s non-oil exports, a key driver of economic growth, fell sharply due to lower demand, particularly in China, a major trading partner.
The economy was additionally constrained by fixing money related conditions, with the MAS fixing strategy for the fifth time in a year in October.
The widened its losses slightly and traded 0.3% lower against the dollar as a result of its negative reaction to the CPI and GDP data.
