Singapore not facing stagflation: S Iswaran

Singapore not facing stagflation: S Iswaran

 

Senior Minister of State for Trade and Industry S Iswaran says Singapore is not facing stagflation, or the phenomenon of low growth coupled with high inflation.

 

Speaking in Parliament, Mr Iswaran said the economy grew by 4.3 percent in the first half this year.

 

That, he said, is within Singapore’s medium term potential rate of growth of between 4 and 6 percent.

 

Citing the 73 thousand new jobs created in the first quarter this year, Mr Iswaran said the job market remains healthy with unemployment staying low.

 

As for whether Singapore’s full-year growth forecast would be revised, Mr Iswaran said that would come under review in August.

 

“In Singapore, the strong pipeline of foreign investments and tourism projects that we have secured will also provide a certain level of support to the economy for the rest of this year and beyond. These new projects will give rise to new activity and help create new jobs. Earlier in May, the MTI estimated GDP growth forecast for this year at 4 to 6 percent. We will review this forecast in August after we have compiled all relevant data for the first half of 2008.”

 

Turning to inflation, Mr Iswaran said the high inflation of 7.5 percent registered in April and May was due to high global food and fuel prices.

 

He added that the appreciation of the Singapore dollar has helped to offset some imported inflation.

 

Mr Iswaran said inflation is expected to moderate in the second half this year as the GST effect wears off, but he stressed prices would not return to previous levels.

 

Source: 938Live