The Singapore economy grew by 1.4 per cent on a year-on-year basis in the third quarter of 2015, easing from the 2 per cent growth in the previous quarter, according to preliminary estimates released by the Ministry of Trade and Industry (MTI) on Wednesday.
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The Monetary Authority of Singapore (MAS) will allow the Singapore dollar to appreciate at a slightly slower pace, the central bank said in a statement today (Oct 14).
SINGAPORE-Singapore became the latest Asian nation to take policy action to support its sputtering economy as China’s slowdown casts an increasingly large shadow on growth prospects in the region.
A technical recession is defined as two consecutive quarters of quarter-on-quarter fall in GDP. However, the rate of appreciation will be reduced slightly.
The Monetary Authority of Singapore (MAS) has eased monetary policy marginally.
For the third quarter, gross domestic product (GDP) rose 1.4 percent from the year-earlier period.
The decision by Singapore comes ahead of monetary policy decisions in South Korea and Indonesia on Thursday, though economists see those central banks as likely to hold fire following previous cuts by Seoul, and with currency weakness and inflation concerning policy makers in Jakarta.
Fifteen out of 22 economists surveyed by Bloomberg expect the MAS to ease for a second time this year tomorrow as the economy faces a possible technical recession and continued deflation.
“We still have about a more-than 50 percent chance of no move, mainly because I think the growth and the inflation story is not disastrous by any account”, she said.
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The S$NEER has softened and moved largely in the lower half of the policy band since July, as strong expectations of US Fed rate hike and heightened risk aversion exert downward pressure on the Singapore dollar. On a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded by 0.1 per cent, a reversal from the 2.5 per cent contraction in the preceding quarter. Coupled with weak import demand from the USA and a “gradual” pickup in economic activity in the eurozone and Japan, they state “As a outcome, the growth outlook for Asia ex-Japan as a whole has dimmed”. However, the width and level at which the policy band was centred were kept unchanged.
