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Singapore’s Economy Expected To Grow At A Slower Pace

Singapore’s economy is expected to grow at a slower pace this year than what economists expected months ago, this was according to the Monetary Authority of Singapore (MAS).

The recent quarterly survey conducted by MAS showed that economists now expect the gross domestic product (GDP) to grow 2.4 percent in 2012from the 3 percent growth forecast in the previous survey.

According to MAS, global economic conditions are expected to remain sluggish for the rest of the year. The step up in uncertainties in the Eurozone, and the slowdown in the US and Asia will have a restraining effect on the Singapore economy said MAS in its report on the Recent Economic Developments of Singapore.

MAS also said that accordingly, activity in Singapore economy is expected to remain weak for the rest of the year. The external-oriented industries, including manufacturing, wholesale trade, and transport and storage will continue to be dampened by the pullback in global demand.

Meanwhile, for inflation, the consumer price index is seen at 4.4 percent this year, up from 4.2 percent from last year. CPI-All Items inflation rose to 5.3 percent in the second quarter from 4.9 percent in the first quarter of this year. This is due to a steeper rise in accommodation and private road transport costs. However, services, oil-related and food inflation moderated.

Growth is expected to slow in other sectors too. This year, manufacturing is estimated to grow 2.7 percent compared with 3 percent in the previous MAS survey. Financial services were down to 1.1 percent from the 2.7 percent growth. The construction industry also slowed at 5.6 percent from the preceding 6.2 percent.

Singapore’s economy is forecasted by economists to be at 3.9 percent next year, compared to the previous forecast of 4 to 4.9 percent.

The MAS survey among economists is conducted after the release of economic data for the preceding three-month period. The median forecasts were based on the estimates of 22 economists.