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.