Singapore growth on track despite interest rate hikes, China slowdown
Singapore growth on track despite interest rate hikes, China slowdown
Agence France-Presse, Singapore
Singapore should achieve its economic growth target this year
despite risks from rising interest rates, higher oil prices and a
slowdown in the Chinese economy, the central bank said on
Wednesday.
Koh Yong Guan, managing director of the Monetary Authority of
Singapore, said the world's economic recovery should support the
trade-reliant domestic economy's robust growth.
"Notwithstanding the risks from rising interest rates, higher
oil prices and a sharper-than-expected slowdown in China, the
upturn in the global economy is likely to be sustained through
the rest of this year and will support the continued expansion in
the domestic economy," he said.
The government is targetting gross domestic product (GDP)
expansion of 5.5-7.5 percent for 2004, but recent robust economic
data has prompted some private sector economists to raise their
projections above the official forecast.
A number have lifted their growth rate forecasts to up to nine
percent, following advance government figures released last week
that showed Singapore's economy expanded 11.7 percent year-on-
year in the second quarter.
Koh said the central bank was in constant touch with the trade
ministry on whether to upgrade the official forecast.
Reinforcing Singapore's strong economic prospects, Koh
emphasised the International Monetary Fund (IMF) and the World
Bank had given high marks to the city-state's financial sector
and legal supervisory and institutional framework.
Singapore has also maintained its position as the only Asian
country to have a 'triple A' rating from global credit rating
agencies such as Standard and Poor's and Fitch, he said.
Singapore's economic pickup and the global recovery has
continued despite a range of potentially dampening factors.
Federal Reserve policymakers in the United States on June 30
raised the target for the federal funds rate, which commercial
banks charge each other overnight, to 1.25 percent from a 1958
low of 1.00 percent.
There are concerns similiar rate increases around the world
would affect domestic demand which has been partly fuelling
growth.
Oil prices also remain near record highs with the benchmark
New York light, sweet crude contract consistently around US$40a
barrel.