By Xinghui Kok
SINGAPORE (Reuters) -Singapore’s financial system grew 2.7% year-on-year within the first quarter of 2024, the quickest tempo in 18 months, information confirmed on Thursday as the federal government mentioned it anticipated manufacturing and trade-related sectors to enhance over the course of 2024.
The expansion matched a preliminary estimate launched final month and was stronger than the two.5% forecast by economists in a Reuters ballot. It was the quickest tempo because the financial system grew 4.1% on a year-on-year foundation within the third quarter of 2022.
Edward Robinson, deputy managing director of the financial coverage group on the Financial Authority of Singapore (MAS), mentioned after the info that present financial coverage settings have been applicable.
“The prevailing rate of appreciation of the exchange policy band is needed to keep a restraining effect on imported inflation as well as domestic cost pressures,” he mentioned at a media briefing.
“We had assessed it to be sufficient to ensure medium-term price stability in the economy.”
The central financial institution left financial coverage settings unchanged at a coverage overview in April. The subsequent coverage overview is due in July.
OCBC economist Selena Ling mentioned MAS coverage will possible stay unchanged for relaxation of the 12 months. “They are still awaiting the easing in core inflation in the fourth quarter,” she mentioned.
Whereas inflation has fallen from its peak of 5.5% in early 2023, it stays cussed amid slowing financial progress and had reached a seven-month excessive in February.
On a quarter-on-quarter seasonally adjusted foundation, GDP expanded 0.1% within the January to March interval, according to the preliminary estimate.
LEADERSHIP CHANGE
The commerce ministry, which maintained its GDP progress forecast for 2024 at 1.0% to three.0, mentioned the manufacturing and trade-related sectors have been anticipated to see a gradual pick-up over the course of the 12 months.
OCBC’s Ling mentioned first quarter information confirmed the financial system was on monitor for full-year GDP to return in “slightly above the 2% handle”.
Non-oil exports for the trade-reliant financial system have been falling, with an annual 9.3% contraction in April and a 20.8% contraction in March.
Enterprise Singapore mentioned on Thursday its forecast for the 12 months was for non-oil exports to be at +4.0% to +6.0%.
The commerce ministry noticed some dangers, together with geopolitical tensions disrupting provide chains and commodity markets, tight international monetary circumstances and rising market volatility as coverage cycles diverged from superior economies.
The Asian monetary hub has simply had its first management change in 20 years, with Lawrence Wong taking on as prime minister final week. In his inauguration speech, Wong mentioned he was taking on at a difficult time globally.”As an open economy, our livelihoods will be hit when multilateralism fractures,” he mentioned.
