The impact of the Russia-Ukraine war has more or less affected all countries. Singapore is not left out. Due to the effect of this war, the pressure of inflation has increased in the country. Therefore, Singapore tightened its monetary policy to reduce inflation. Since October 2021, the country’s central bank has tightened this policy for the fourth time. The article contains Singapore Tightened Monetary Policy to Control Inflation.
According to a statement published by the city-state, the country’s economy expanded by 4.8 percent from April-June this year. This rate is more than 4 percent in the previous three months. Instead of interest rates, the dollar’s exchange rate in the local market is based on Singapore’s monetary policy exchange rate. The Monetary Authority of Singapore (MAS) stated that the inflation forecast had been raised to 4 percent from 3 percent, compared to 2.5 percent to 3.5 percent in the first forecast. On the contrary, the country’s central bank, the Central Bank of Singapore, said overall inflationary pressure will continue in the coming months. However, the global supply chain is starting to ease.
The April-June gross domestic product figures also accelerated. However, this figure is lower than the forecast. Economists polled by Reuters had forecast a 5.2 percent growth for the period. According to the country’s Ministry of Commerce and Industry, the manufacturing sector has increased by 8 percent. Besides, the service sector has increased by 4.7 percent and the construction industry by 3.8 percent.
The city-state’s government expects an annual GDP growth rate of 3-5 percent this year. However, growth will likely slow as the Russia-Ukraine war disrupts fuel and food supplies. Nevertheless, the country’s economy grew 7.6 percent in 2021, the highest in a decade. The country has regained economic growth after a 4.1 percent contraction in 2020 due to COVID-19 Pandemic.
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