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Singapore's GDP to grow 1 to 3% in 2016

Staff Writer |
As the global economy is headed for another year of lackluster growth, the forecast of Singapore's GDP growth in 2016 stands at 1 to 3 percent, said the Monetary Authority of Singapore (MAS).

The central bank on Monday released its Annual Report 2015/16, in which MAS expected Singapore's economic growth remains sluggish, adding that the economy's performance in the second half of 2016 will not be too different from the first half.

The report revealed that Singapore's real GDP growth came in at 0.8 percent in the second quarter on a quarter-on-quarter, seasonally adjusted annualized basis. Growth in the first half of the year has averaged 2.2 percent in year-on-year terms.

Inflation, which has been low for long, is on a modest ascent, said the authority. Core inflation, which excludes accommodation costs and private road transport costs, is expected to rise gradually over the course of this year.

For the whole year of 2016, core inflation will likely average around 1.0 percent and trend towards its historical average of close to 2.0 percent over the course of 2017, MAS expected.

The sluggish growth of Singapore's economy is amid the outlook of lackluster growth globally. MAS noted that recovery in the advanced economies is hesitant and uneven. Economic activity is slowing in the emerging market economies.

MAS is closely watching these developments, especially three factors that are key to the growth outcomes in 2016, namely, Brexit and its implications; the shape of the recovery in the U.S. economy; as well as slowdown in the Chinese economy.

The authority noted that the UK referendum vote to exit the EU will have an impact along several dimensions, not only on financial markets and possible consequences for financial stability, but also on political and social developments.

MAS expected that U.S. economy is to stay on a moderate expansion path, while China's growth should slow, but without a "hard landing".

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