Singapore trims 2022 growth forecast

SINGAPORE

Singapore yesterday narrowed its economic growth forecast this year after the economy contracted in the second quarter compared to the previous three months due to rising inflation and tighter monetary policies, the government said.    

Moves by central banks worldwide to tighten borrowing costs in order to deal with rocketing prices have weighed down on global demand for Singapore’s exports, with the government painting a grim picture for the rest of the year.    

Economists often see the performance of the city state’s open, trade-driven economy as a barometer for global trading activity.    

Singapore’s economy is now projected to expand by 3.0 to 4.0 percent this year, trimmed from a 3 to 5 forecast earlier, the trade ministry said in a statement.    

The economy grew by 4.4 per cent year-on-year in the second quarter to June, faster than the 3.8 per cent growth recorded in the previous quarter, it said.    

But compared to the previous three months, the economy contracted by 0.2 per cent, reversing the 0.8 percent expansion in the first quarter.    

Selena Ling, chief economist at OCBC Bank, said the strong recovery in the aviation and tourism sectors after Singapore lifted coronavirus restrictions should help cushion the effects of slowing global demand.